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Govt called to consider raising price threshold of “My First Home” scheme Print E-mail
Thursday, 28 October 2010 00:00

KOTA KINABALU: The Sabah Housing & Real Estate Developers Association (SHAREDA) has called on the government to consider increasing the price threshold of RM220,000 to between RM300,000 and RM350,000 for home buyers under the ‘My First Home Scheme’.

The scheme was announced by Prime Minister Datuk Seri Najib Tun Razak under Budget 2011 recently which provides a guarantee on down payment of 10 per cent for houses below RM220,000 for buyers earning below RM3,000 a month.

The Real Estate & Housing Developers’ Association (REHDA) president Dato’ Michael Yam Kong Choy has also made a similar call recently saying that if the price is not increased it will not have the far-reaching benefits for the people, especially within the city centre of Kuala Lumpur.

In the wake of the request, Housing and Local Government Minister Datuk Wira Chor Chee Heung said its ministry will look into the matter.

SHAREDA president Datuk Susan Wong Siew Guen when asked to comment on the situation in Sabah yesterday said the association actually concurred with what REHDA had voiced out.

“The scheme provided by the government is actually very attractive but it is very difficult to buy a basic house for under the price of RM220,000 in the city centre of Kota Kinabalu as you can see the price of a house for example a terrace unit in the city starts at RM278,000 and above,” she said.

She added that the maximum time frame given by commercial banks to service the loan is 30 years and the age of the borrowers varies as in some banks it must not exceed 60 years old while some allowed up to between 65 and 70 years old.

Nowadays, she said RM220,000 is only good enough to buy a decent apartment while for a landed property the price is more than that. On this she said the request by REHDA and SHAREDA to increase the threshold to RM300,000 or so is very reasonable as we in Sabah also share the same sentiments.

On the speculation that the construction activity in the property sector is likely to slow down towards the year-end, Susan said the economy situation in Sabah is very stable even though if there is a crisis elsewhere the effect felt by the State will still be very mild.

Chor had said that developers were taking a cautious stance as they wanted to wait and see how the country’s economy performs to external demands from Europe and the United States.

“The reason is that in Sabah, our property sector is always dependent on domestic market as we don’t rely very much on the Malaysia My Second Home (MM2H) programme and foreign investments, although lately our tourism sector had been booming,” she said.

“Actually in Sabah the boom of the property sector depends on the State healthy oil palm industries activities, so long the price is stable the demand for domestic properties will be there,” she stressed.

“Sabah economy is very good as most of the oil palm planters are known to be cash rich and they had invested a lot of their money buying property especially shop lots for rental return,” she noted.

In fact, the property sectors in Sabah had received a boost recently as the government had revised the loan entitlement for the public servants from RM300,000 to RM400,000 or an increase of 20 per cent to 30 percent, making their affordability to buy a house higher, she added.

Unless, the economy of the whole world collapsed or the demand and price of the oil palm is dropped in the world market, then the scenario in Sabah will be different, she said.

Susan recalled that the worst experience she ever went through was the 1997 Asian financial crisis which affected the whole region, and at the time the financial institutions had frozen all their loan facilities, making the business sector suffered dearly as bank interest went up from eight percent to a shocking 29 percent before the ringgit was pegged and stabilised.

The second wave of crisis came in 2006 but it was only a mild blow as the housing property sector experienced a showdown due the US subprime crisis which had also affected a lot of other related industries in the property market.

Looking ahead, she said the east coast town of Lahad Datu is experiencing a boom lately, thanks to the government for pumping a lot of money there to boost the Palm Oil Industries Cluster (POIC) and the oil palm activities there.

And to support these activities, she said a lot of properties such as shoplots, landed properties like terrace and bungalows houses as well as apartments and hotels were launched recently in Lahad Datu. And the sales from all these projects received an overwhelming response from the local and outstations buyers.

Although the focus had been shifted to the east coast lately, Susan said the momentum in the west coast areas is still moving at a steady pace.

“In fact, I met a lot of developers (in west coast areas) and they told me they are ready to launch their new project anytime soon but due to the delay in the approval of the development plans (DPs) a lot of projects had been put on hold,” she said adding that a refined guidelines and new measures to speed up the approval of DPs is expected to be announced at SHAREDA’s annual dinner this coming Saturday.

Source: http://www.newsabahtimes.com.my/nstweb/fullstory/43753



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