Rehda hopes Budget 2024 will address housing affordability issue

KUALA LUMPUR - The Real Estate and Housing Developers’ Association (Rehda) hopes the government will address the affordability or, rather, the unaffordability of houses in the nation as well as introduce measures to alleviate challenges developers continue to face in the upcoming Budget 2024.

In its budget wishlist, the association’s president, Datuk NK Tong, said that as housing affordability remained a major issue for the people and industry alike, it hopes for the reintroduction or introduction of incentives that would allow more Malaysians to buy a house to call their own.

"These include incentives in the form of tax deductions, grants, as well as lower interest rates that will surely lessen the burden of future homeowners, particularly first-time buyers.

"We also request for the Home Ownership Campaign to be continued, as its two iterations in 2019 and 2020-2021 have not only helped thousands of Malaysians own their dream home but also contributed significantly to the country’s gross domestic product,” he said in a statement.

In a statement, Rehda said that other than the cross-subsidy method developers have to undertake to build affordable housing, another major factor contributing to the issue is the rising input cost for building materials, which correlates directly with rising house prices.

It said the government’s intervention, such as temporary reduction or removal of import levy, would go a long way in mitigating the problem.

"Similarly, the rising land cost is adversely impacting house prices,” it said.

Rehda pointed to a recent interview where Employees Provident Fund’s chief strategy officer, Nurhisham Hussein, said that for housing to be truly affordable, state finances should be overhauled.

Nurhisham added that 95 per cent of state income was derived from some form of property tax, such as land conversion premiums, and therefore, reforming state finance is essential when discussing affordable housing.

"As developers, we concur that should charges imposed by state governments and local authorities be reduced, house prices will most likely be reduced to levels that make homeownership attainable for more people,” said Tong.

Aside from that, Rehda is also encouraged by Prime Minister Datuk Seri Anwar Ibrahim’s numerous calls for a fair and transparent government at all levels, including state and amongst privatised utility companies.

Meanwhile, PropertyGuru Malaysia country manager Sheldon Fernandez hopes that the Budget 2024 will not only look at ways to increase income and wages but also at how it could effectively manage and execute initiatives around affordable housing.

He said that this was due to the income disparity and that median income needs to catch up with property prices as it only grew 2.5 per cent last year instead of over three per cent pre-pandemic times.

"We are seeing targeted approaches by the government towards affordable housing, subsidies and addressing the rising cost of living.

"But more importantly, we want to see more effective planning and implementation. We want to see that it is done well so that the income gap could be closer,” Sheldon told Bernama. - BERNAMA