A sustainable lending policy based
on prudent and responsible lending
supported by genuine prove of ability
to pay, with sufficient credit risk and
property risk analysis, would help the
industry better. Let’s see what our
expert had to say:
At this juncture, the government must
take note that there are property “selfproclaimed
experts” or “gurus” who are
drumming up campaigns about how
they owned tens of properties and how
they can teach people to secure several
loans at the same time.
These gurus (mushrooming in Facebook)
are behaving like financial advisers
without licensing, tempting those who
are naive with hopes. The measures
pronounced by the government only
help people like them.
If they have 19 properties, they can sell
three, keep the gains and buy four or
more properties with the gains. Should
the government help these handfuls of
people or should it have policies for the
people?
These were his suggestions:
1) Housing developers should offer
higher discounts to off-load their
unsold overhang stocks instead of the
government bailing them through a
waiver of taxpayers’ monies.
2) The government must rescind
the above proposal and implement a
sustainable tax. The RPGT tax should
be maintained with the repealing of
perpetual tax of 5% beyond the fifth
year.
3) The 70% loan margin is the
prerogative of the lenders, ie banks
and financial institutions. There is no
economic benefit generated by this
measure except perhaps to make the
rich buy more properties and the banks
to shoulder the risks.
4) An initial grant to first-time
house buyers to enable them to buy
the affordable houses that are being
offered. This could attract a larger
number of people to buy houses and as
well as to resolve the housing shelter
problem. First-time house buyers can
also be assisted by waiving the stamp
duty for the first house that they buy.
This will further encourage first-time
buyers to buy a house for themselves.
5) The government could perhaps
be more specific in the reintroduction
of HOC. Developers who are holding
properties not sold but completed with
CC or OC for more than three years can
be supported by HOC.
We concur with Chang as we too have
mentioned that whatever benefits or
waiver should include secondary market
sales too and not just developers. Even
with a RPGT waiver, it is going to be
tough for people to dispose of their
property if these incentives are only
offered to products in the primary
market. It is without doubt buyers
would flock towards new developments
to enjoy the given benefits and neglect
products that are in the secondary
market. This would inevitably crash the
secondary market in time to come.
According to Chang, if these benefits
were offered to the secondary market
too, owners could consider refinancing
their property since the interest rate has
been reduced by the banks to stimulate
the domestic market.
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