Chance for all to own a home
07/09/2007 The Star By WONG CHUN WAI

TAN Sri Nor Mohamed Yakcop is fond of telling his friends that there are two important assets in a man’s life – his wife as an emotional asset and his house as the physical asset.

The wife and the house are two things that a man must have, and without one of them a man’s life is incomplete. They are necessities but anything more than that would be considered a luxury, jokes the Second Finance Minister.

For the ordinary Malaysian wage-earner, settling the housing loan would take up a huge chunk of his salary. The other big bills are the car loan, food expenses, household expenses and the children’s school and tuition fees.

After the Employees Provident Fund and income tax deductions, the salary worker would find that his take-home pay has shrunk. For many, especially those starting out in life, owning an apartment, let alone a house, remains an elusive dream.

But the Prime Minister is determined to give every Malaysian a chance.

Malaysians can take comfort that the country’s economy has been cruising steadily at an average of 6% annually and is predicted to reach 6.5% next year, barring any external factors that can negate it.

It is the 19th largest trading nation in the world, with business activities valued in excess of RM1tril. We have been able to maintain this position because of our political stability.

We may have our flaws and sometimes we are overly critical of ourselves, but the system has worked well. Per capita income has increased 26 times to RM20,841 and the incidence of poverty has been reduced to less than 5%.

Call it a general election Budget or whatever, but we can look forward to what the Prime Minister has to give to Malaysians today.

A house-financing scheme to ease the burden of the lower- and middle-income groups is expected to be unveiled by Datuk Seri Abdullah Ahmad Badawi today.

While there are no details, there is talk that there will be a mechanism allowing EPF contributors to make monthly deductions, which is certainly a major move towards home ownership in Malaysia.

Currently, the EPF allows two schemes of withdrawals for contributors below 50 years old. To buy or build a house or a shophouse consisting of a residential unit, depositors can withdraw from Account Two the difference between the purchase price and the loan obtained plus 10% of the purchase price, or 30% of the total amount deposited in the EPF, whichever is lower.

Under the second scheme for reducing or settling housing loans, depositors can withdraw the whole amount from Account Two or the outstanding amount of the housing loan, whichever is lower.

The new scheme will certainly be an appropriate Merdeka gift. No details are available as to how it would work as there are reports that it may involve the setting-up of a revolving housing loan fund with contributions from both the Government and financial institutions.

But what is important is that the home finance scheme will benefit Malaysians across the board, regardless of race or religion. All will benefit.

That aside, developers have many good reasons to celebrate as the Government has already introduced various proactive measures such as the exemption of Real Property Gains Tax and the removal of the limitation on the number of loans given to non-residents.

Then, there is the lifting of Foreign Investment Committee approval on residential properties above RM250,000, which would strengthen efforts to make Malaysia a regional property hub.

Housing and Local Government Minister Datuk Seri Ong Ka Ting also announced the setting-up of a one-stop centre to expedite approvals for development of housing projects and incentives to developers to undertake the build-and-sell concept.

If the residential sub-sector was moderate previously, the purchasing sentiment has improved following these new measures. In the first half of this year, the Malaysian All House Price Index rose by 3.6%.

There will be positive spillover effects when Malaysians are able to buy houses – the living standard of the people will improve, there will buoyant growth in business activities, especially in construction, retail, banking and information, which will led to creation of thousands of jobs and better incomes for Malaysians.

To make this effective, the leadership will need the support of the state governments to implement this business-friendly move. Unpractical and unrealistic requirements that hinder the property market should be removed.

For Malaysians who have expressed concern over the deteriorating law and order situation, the Budget is certain to include a huge sum to fight crime.

The Government is expected to adopt the London-style camera surveillance system where thousands of cameras are installed to deter criminals and traffic offenders.

This network of cameras will effectively help our police force and, in some ways, reduce manpower needs.

A better standard of living and moves to make us feel safer are certainly welcome news.