Budget 2012 - Property Sector

Prime Minister Datuk Seri Najib Tun Razak's Budget 2012 speech in Parliament.

Property Sector :

- To meet the demand for houses from those earning below RM3,000, the Government launched the My First Home Scheme in March 2011. To expand the scheme, the Government proposes to increase the limit of house prices from a maximum of RM220,000 to RM400,000. This improved scheme will be available to house buyers through joint loans of husband and wife beginning January 2012.

- To enable buyers to own houses, the Government established the 1Malaysia People's Housing (PR1MA) as the sole agency to develop and maintain affordable and quality houses, specifically for middle-income group. PR1MA will be the developer for projects on land owned by the Government. In this regard, the Government intends to develop several plots of Government-owned land around Sungai Besi and Sungai Buloh. The Government will also identify areas in the vicinity of MRT, LRT and other public transport system to be developed by PR1MA for housing projects.

- In addition, PR1MA also welcomes the cooperation with private sector to develop similar projects. In this respect, several private developers responded to the Government's call to provide affordable and quality housing. PR1MA will play a main role in ensuring that the distribution of the housing units will be transparent and fair through an open balloting system. In 2011, 1,880 houses will be built in Putrajaya and Bandar Tun Razak.

- In 2012, a total of 7,700 houses will be built in Cyberjaya, Putra Heights, Seremban, Damansara and Bukit Raja. House prices under this scheme are lower than market prices as the land and facilitation funds are provided to developers. As an example, one apartment unit with an area of 1,000 square feet in Putrajaya is priced RM150,000 compared with the market price of RM220,000. The Government will also provide 100% stamp duty exemption on loan instruments for the purchase of houses.

- Most houses are sold before construction starts and buyers bear risks of projects being delayed or abandoned. To protect buyers, the Government will encourage the construction of more houses using the build then sell concept. For this purpose, Islamic banks have agreed to provide shariah-compliant financing and undertake construction risks. Instalments only commence after the house is completed. This scheme will be implemented for houses costing RM600,000 and below.

- There are many among the rakyat, especially the lower income group, who have yet to own houses. Therefore, the Government will continue to implement the Program Perumahan Rakyat (PPR) by building 75,000 units of affordable houses nationwide under the 10MP. In 2012, RM443mil is allocated for the construction of 8,000 units for sale and 7,000 units to be rented.

- The Rumah Mesra Rakyat (RMR) programme, managed by Syarikat Perumahan Negara Berhad (SPNB), will be continued to help the low-income group to own decent houses. Under this programme, those with land but without a house or live in dilapidated houses are eligible for financing to build a house. SPNB will build 10,000 units in 2012. Each house costing RM65,000 will be sold for RM45,000 and the Government will subsidise RM20,000. For this, the Government will allocate RM200mil.

- Apart from this, through the Abandoned Housing Rehabilitation Programme, the Government successfully rehabilitated and obtained the Certificate of Fitness (CF) for 82 projects involving more than 15,000 units. The Government will continue this noble effort with an allocation of RM63mil in 2012 to rehabilitate 1,270 abandoned houses. The Government will also allocate RM40mil for restoration and maintenance of public and private low-cost housing.

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