Bumiputera discount: A sensitive topic that must be addressed

by Terence Fernandez, fz.com

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  A 7%-10% discount cap for bumiputera house buyers is a controversial but much-needed initiative to address spiralling house prices.

A CAP on the 7%-10% discount for bumiputera house buyers is a controversial but much-needed initiative to address spiralling house prices.

The National House Buyers Association (HBA) said the powers-that-be have to just bite the bullet and explore such reforms if it is sincere in providing affordable housing to all.

In its presentation on July 17 at a discussion in housing issues, the HBA proposed that bumiputera discounts be limited to the first two properties.

HBA honorary secretary-general Chang Kim Loong said one must look at the spirit of the bumiputera discount, which was to allow not so well off bumiputeras to own homes and avoid polarisation of neighbourhoods.

"It gives food for thought as to why the well-off should also enjoy this privilege," he said, revealing that the HBA proposed high-end properties such as penthouses, semi-detached houses and bungalows be exempted from the bumiputera discount privilege.

It also proposed a price cap of RM1 million to enjoy the discount.

Other than that, a growing number of unsold bumiputera lots is also contributing to the glut.

"Instead of looking for more development sites, these unsold units should be opened up faster," Chang said.

This is one area where the HBA and the Real Estate and Housing Developers Association (Rehda) are on the same page.

Rehda president Datuk Seri Michael Yam had last year proposed that unsold bumiputera lots be allowed to be disposed of to non-bumiputeras six months after the property receives its certificate of fitness (CFs).

There are about RM4 billion worth of unsold bumiputera property and Rehda has also been championing for a review of the 30% bumiputera quota imposed on developers.

However, Chang cautioned that this proposal must be dealt with delicately to avoid misunderstanding.

"We must explain this carefully and underline that reviewing this policy is merely a practical measure to resolve a bigger problem. It will benefit all Malaysians in the long run as there will be more supply," he said.

The HBA also opined that the steep rise in property prices was attributed to the lack of land, hence opening up government landbanks is one initiative that the powers that be should consider.

Other measures to control the cost of constructing houses touches on specific government policies such as allowing direct recruitment of foreign workers instead of the current agent practices; reducing the levy on foreign workers; and transfer the burden to provide utilities in new developments from the developer to the utility companies.

Another proposal which the government is already looking into is to reduce the approval time frame for construction permits.

Currently, it takes up to 392 days for an approval, although this can be brought down to 67 days via a one-stop centre (OSC).

The target is to further reduce this time frame to 47 days by next year.