PRIME Minister Ismail Sabri Yaakob has launched i-Miliki, essentially a form of tax exemption, for first-time homeowners. 

Under this scheme, first-time home buyers would be exempted from stamp duties for 18 months.  

The ownership campaign, known as HOPE, is modelled after the old home ownership campaigns (HOCs) launched by the previous administration.

According to reports, some RM950 million in potential tax revenue have been lost since the HOCs were launched. 

Some developers have launched their own private ownership campaigns.  

The government, via the Housing and Local Government Ministry, PR1MA and other agencies, does build low- and medium-cost housing to encourage home ownership.

Medium-cost housing schemes target households with a monthly income of RM2,500 to RM15,000 while PPR (low cost housing) schemes are designed for households in the B40 category earning below RM5,000 a month. 

A maximim income requirement is also applicable for state and municipal housing projects, such as Rumah Selangorku and council units. 

Many Malaysians, particularly those below 30, do not qualify for these programmes as they do not meet the threshold salaries. Many fall through the cracks, and they are the ones most in need of assistance. 

Even those who qualify find themselves in a quandary as they had not factored in additional household expenses like children, emergencies, inflation and financial costs. 

Those already in debt find themselves even owing more.

Making homes and financing more accessible to the lower strata of society comes with many costs for the government.

Banks that are pressured to give out these loans may need to cross-subsidise them from other, more profitable channels.

Buyers will now need to allocate a portion of their income to service a long-term loan, losing liquidity and money that could be used for education, either for themselves or their children or start a side business or other income-generating pursuits. 

These campaigns encourage the building of even more properties, enlarging the glut of unsold homes, keeping the housing market unnaturally high, and risking a potential subprime mortgage crisis should the economy fail to pick up. 

The “one family, one home” idea is derived from the ideals of the 1980-90s, when owning a home meant saving on rent and having a stable asset that generates potential returns and can be re-mortgaged when cash gets tight. It could even become and an heirloom inheritance to increase generational wealth. 

But the ever-increasing price of building materials and land, especially in the past few years, coupled with the stagnant economy and relatively flat wage levels, home ownership in Malaysia today, especially for the young and the B40, may no longer be the best idea.

Many developed countries today, like our neighbour Singapore, are leveraging home ownerships, where the state sells you your home and then buys it back from you in your twilight years, serving as a pension of sorts. 

Others are looking at cross-generational loans. 

These financing and refinancing ideas go hand-in-glove with purpose-built housing with fixed timeframes for redevelopment of units ito mall office-home office, retirement homes, assisted elderly living, modular housing, temporary housing utilising unused space, urban farming and so on. 

Perhaps it is time we studied these models with a long-term view toward lower costs, sustainability, and the environmental impact, instead of pushing everyone to own a home for the sake of political expediency.

The old formulas don’t necessarily work anymore, and we need to resolve the real problems. – July 21, 2022.

* Emmanuel Joseph firmly believes that Klang is the best place on Earth, and that motivated people can do far more good than any leader with motive.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.