Budget 2024: HBA’s response
Edge Prop, 19 October 2023
- HBA’s suggestion is for the “Special Guarantee Fund” to be monitored by the Ministry of Finance with an intelligent team undertaking the selection process of responsible housing developers, reputed contractors/builders and white knights who have proven track records and good financial standing.
The National House Buyers Association (HBA) acknowledges the challenges faced by our Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim in tabling Budget 2024 from the MADANI Government last Friday (Oct 13) amidst the rising cost of living and various global economic headwinds.
While we view most of the announcements positively, we can’t help but be concerned about certain measures.
Sick and abandoned housing projects
HBA notes the Government has mobilised a special task force under the Local Government Development Ministry (KPKT) to solve the problem of late, sick and abandoned private housing projects. On top of that, a “special guarantee fund” amounting to RM1 billion is allocated to incentivise reputable developers to revive selected abandoned projects.
Although this looks like a step in the right direction, HBA’s concern is that the “special task force” may be made up of the very people entrusted to license, monitor and enforce the Housing Development (Control & Licensing) Act (HDA). If they have failed miserably in their gatekeeping role (resulting in the voluminous problematic housing projects), how can they now be entrusted to revive sick and abandoned projects?
HBA also applauds the “special guarantee fund” of RM1 billion to encourage developers to revive abandoned projects. It is hoped that with this grant, the developers can revive the abandoned projects without requiring the existing house buyers to pay large sums of monies as they have already suffered great financial losses.
HBA’s suggestion is for the “Special Guarantee Fund” to be monitored by the Ministry of Finance with an intelligent team undertaking the selection process of responsible housing developers, reputed contractors/builders and white knights who have proven track records and good financial standing. The Government cannot afford to have the “abandoned project” abandoned again by errant salvagers. On top of that, the Government must select the low-hanging fruit, i.e. those abandoned projects which are near finishing – to achieve maximum result.
Meanwhile, HBA continues to call for a more balanced financing system that will not burden ordinary house buyers to lifelong repayment terms with an interest rate that is higher than our average salary increment without the possibility or ease of terminating the arrangement even when faced with abandoned housing problems.
At the same time, we urge for deterrent controls against developers who have the habit of winding themselves up to avoid their contractual and statutory obligations. There must be a strict monitoring, supervision and enforcement of the HDA and its regulations.
Additionally, pre-emptive measure must be adopted and safety nets must be cast to avoid future abandonment of housing projects.
Anwar has said that to facilitate the redevelopment of old buildings in cities, the residents' approval threshold for en-bloc sales will be reduced from 100% to a level consistent with international practices, as seen in Singapore.
First and foremost, the “residents” have no say in any dissolution of stratified properties or en-bloc. The rights and entitlement rest with the owners (whether registered or having beneficial interest).
HBA reiterates that no rightful homeowner should be disadvantaged in any scheme in the name of redevelopment, rejuvenation, en-bloc or revitalisation when there are plenty of reasons such a move is unnecessary.
The Government must mandatorily conduct a “Regulatory Impact Analysis” (RIA) before proposing a new rate for the so called “consent threshold” before any renewable measures is permitted.
HBA welcomes the announcement of the grants to build public housing projects (PPR) and affordable housing projects (Program Rumah Mesra Rakyat), which are forms of social housing for the B40 and hardcore poor segment. HBA has always stressed that any form of social housing should be provided by the Government and not by private developers.
However, HBA urges the Government to ensure that these PPR and affordable units reach the intended target segment and are not abused by unscrupulous people such as being used as foreign workers’ dormitories.
Housing Credit Guarantee Scheme
HBA welcomes the announcement that the Government will allocate an additional sum of RM10 billion for the Housing Credit Guarantee Scheme to help those without a stable income such as in the gig economy to buy properties.
However, HBA hopes that this scheme will be limited to first-time house buyers and only for the affordable property category priced below RM300,000, and will also be available for purchase of homes from the secondary market.
Maintenance aid for low-cost strata housing
We thank the Government for heeding our call to allocate sufficient monies for the maintenance and upkeep of low and medium-cost stratified housing properties for both public and private across the country.
The current deplorable conditions such as cracked roofs, leaking water tanks and water piping, faulty passenger elevators and dangerous levels of short-circuiting wiring and in electrical rooms have resulted in urban slumps and social problems.
However, this points to another issue that should be addressed. What is the use of building more low- and medium-cost stratified housing when you don’t have the maintenance culture?
KPKT must initiate a programme to educate the owners, occupiers and dwellers of these units on the need to form communities to safeguards their interest. An education programme must be initiated by the Government on the need to preserve and care for the common properties and facilities.
Promote social mobilitya
While homeownership is important, the government should focus on promoting social mobility as well to target the root of the problem.
Social mobility refers to change in a person's socio-economic situation, either in relation to their parents (inter-generational mobility) or throughout their lifetime (intra-generational mobility).
Social mobility is linked to equality of opportunity: the extent to which people have the same chances to do well in life regardless of the socio-economic background of their parents, their gender, age, sexual orientation, race, ethnicity, birthplace or other circumstances beyond their control.
Social mobility and equality of opportunity can be measured in terms of earnings, income or social class, but can also be understood to encompass other well-being dimensions such as health and education.
Those children growing up in low-cost housing and some slums must be given the opportunity to get out from the social stigma to another level in life. The Government must create programmes for them to move up the ladder rather than see them trapped in the vicious cycle of such a fate.
(Web source: https://www.edgeprop.my/content/1907486/budget-2024-hba%E2%80%99s-response#:~:text=Housing%20Credit%20Guarantee%20Scheme&text=However%2C%20HBA%20hopes%20that%20this,homes%20from%20the%20secondary%20market)