By MAK KUM SHI

Financing leniency, economic reform, and improvements for education, sentiment, distribution of wealth and information proposed for Budget 2017 and beyond.

IMPROVING market and investment confidence, granting leniency in financing to first-time homebuyers, and reducing the lapse period for references of transacted property prices were suggested measures to improve the property market.

Infrastructure spending can boost the economy in the short term. However, in the long run, economic reform, educational improvements and other measures are needed to improve productivity.

Malaysian Institute of Estate Agents president Erick Y.T. Kho suggested that the government should familiarise themselves with the current property market situation, where demand and supply are concerned.

It is very important for the property market to gain confidence now. The property market should be supported because its products would encourage foreigners to come to Malaysia.

A lot of transactions have been aborted by foreigners who want to buy Malaysian properties because they do not want to go through the hassle of buying certain landed properties. This is attributed to a breakdown in communication between the Federal and state governments, where land law is under state jurisdiction.

Although Malaysia My Second Home (MM2H) programme is laudeble, more needs to be done. In addition to establishing an ideal one-stop centre to encourage foreign investment, some business investment policies should be changed to attract foreign investment.

Attracting foreign investment should be given first priority as it would have a snowball effect (on the economy). More promotions of investments in the country should be done.

Malaysian Institute of Estate Agents (MIEA) president Erick Y.T.Kho.

Kho cited that some of his overseas customers had commented that property prices are not expensive in Malaysia. In comparison with other countries, properties here are cheap. With Greater Kuala Lumpur’s population of six million, its market is niche.

He suggested that the Government has to be very clear on their policies for affordable housing. In addition to introducing policies for affordable housing, they should build and rent, as a transition for people who cannot afford properties (initially, to eventually own them).

He added that financing should be reasonable and lenient for first-time home purchasers. Although they may be new loan applicants, they are mostly young people with a brighter future.

Citing that the valuation of properties is by reference to transacted property prices, there is a six-month difference in the period of reference. He suggested that the Government should look into the lapse period, as this will improve the kind of financing given to property buyers, who will also be quoted current market prices.

Former Bank Negara Malaysia deputy governor Tan Sri Datuk Dr Lin See Yan suggested that if the economy is slowing down, the Government could do a lot of spending on infrastructure in the short run to boost the national economy.

With low interest rates, borrowings by the Government would be cheap, and pushing big ticket items like infrastructure would make sense.

Former Bank Negara Malaysia deputy governor Tan Sri Datuk Dr Lin See Yan.

However, in the long run, in Malaysia’s case, economic growth can only be achieved through population growth and productivity.

Lin suggested a change in the structure of the economy, opening up the services sector and improving the education system as some of the measures to improve productivity.

The disparity of incomes of households makes a lot of difference and break the fundamental law of economics. It is important to consider how economic growth is disaggregated and distributed between the rich and the poor, with and without debt, and with and without wealth.

Lin estimated that household wealth is roughly twice of household debt. When mortgages are included, household wealth is roughly three and a half times household debt.

However, stating that half of the households in Malaysia earn less than RM5,000 a month, he suspects that a lot of their wealth are within the Employee Provident Fund (EPF), savings and not much cash. Therefore, the wealth debt ratios are more of concern at the lower levels.

At this level of income, there aren’t many houses that they can buy. As there are pressures to improve living standards, borrowing for consumption, such as cars, will continue, running them into more debt.

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