Mah Sing Group Bhd hopes the government expedites the recovery of the property industry as it would lead to a wider impact on the overall economy.
Founder and group managing director Tan Sri Leong Hoy Kum said that the property sector has experienced a challenging year with the lockdown and economic uncertainties caused by the ongoing Covid-19 pandemic.
This has had a significant multiplier effect on more than 140 industries, he said.
Leong hopes that the government would take into account several proposals to revive the property market.
Among them include enhancing measures to ease home-ownership for first-time homebuyers. This includes reinstating maximum loan tenure to 40 years; referring to gross income rather than net income for loan applications; higher debt service ratio; and setting the higher margin of financing up to 100 per cent for first property to help the M40 and B40 groups who are affected during the pandemic.
In addition, Leong hopes the government will consider implementing the Developer Interest Bearing Scheme (DIBS) for first-time homebuyers, as it would provide them the option of not paying both their loan interest and rental payments simultaneously while their property is being built.
The Home Ownership Campaign (HOC) is also being proposed by Mah Sing to the government for an additional year.
Additionally, Mah Sing is proposing that the Home Ownership Campaign (HOC) is extended for an additional year.
Leong said the HOC has been proven to be vital in helping home buyers to secure their home while reducing the housing overhang situation since it was launched," he said.
Other recommendations are exemption of Real Property Gains Tax (RPGT), reducing compliance cost, lowering the minimum threshold for foreign property ownership to RM600,000, and providing incentives for developments incorporating green features.
According to the Real Estate and Housing Developers' Association Malaysia survey, compliance cost remains the most significant factor affecting developers' cash flow in the second half of 2020.
The increase in compliance costs is due to the standard opererating procedures required by the government under the new norm, including the worker's Minimum Standards of Housing and Amenities Act 1990 (Act 446).
Leong said adding to the higher cost of doing business also includes inflation in building materials costs such as steel bar prices.
"In line with the government's aspiration to reduce the house price to benefit the home buyers, we hope that the government could review and reduce the compliance cost, including allowing the capital outlay for private utility companies to be borne by respective asset owners so that savings can be passed on to buyers," he said.
As for RPGT, the PENJANA stimulus package offers exemption from June 1, 2020, to December 31, 2021, whereby the tax is exempted for three residential properties per individual.
Leong said the re-imposition of RPGT on properties sold after five years after the duration could hamper recovery in the secondary residential property category and discourage long-term investment.
He hoped the RPGT on properties sold after five years would be eliminated as an incentive to stimulate the secondary market.
On the threshold for foreign property ownership, Leong hopes that the government could review and standardise the minimum threshold to RM600,000 across all states, especially in the areas with high overhang such as Klang Valley, Johor, and Penang.
He added that the current currency rate will attract foreigners to invest in tangible investments and this will help to reduce the property overhang.