PETALING JAYA: Malaysians should not rush to buy new houses just because of the financial assistance offered under the Home Ownership Campaign (HOC).
Malaysian Financial Planning Council deputy president Dr Desmond Chong said despite the aid to prospective home buyers, the public should consider the uncertainty arising from the Covid-19 pandemic.
He advised those without readily available liquid assets sufficient to support them for at least a few months, to postpone making home purchases for the time being in case they lose their jobs.
“You have to look at your liquidity ratio (your ability to pay off current debt obligations without raising external capital). If anything should happen and you lose your earnings, will you have enough liquid assets to pay your debts?
“I would say people should be able to sustain themselves for at least six months before making any hasty purchases. They should be more cautious if the jobs they are skilled at are hard to come by.
“One should have enough surplus cash to repay one’s debts,” he told theSun.
Chong said prospective home buyers should ensure their debt service ratio does not exceed 50pc of their overall monthly income.
The financial education trainer’s comments were in reference to Prime Minister Tan Sri Muhyiddin Yassin’s announcement last Friday on the exemption of stamp duty for purchase of residential homes priced between RM300,000 and RM2.5 million.
The exemption on the instrument of transfer is limited to the first RM1 million of the home price, whereas full stamp duty exemption is allowed for sales and purchase agreements signed between June 1 and May 31, 2021.
Real Property Gains Tax exemption will also be available to Malaysians for the disposal of residential homes from June 1 to Dec 31 next year.
When asked if HOC would spur more Malaysians to buy homes, Chong said this would be the case for those who had prior intention of purchasing a home.
Nawawi Tie Leung Property Consultants Sdn Bhd managing director Eddy Wong believes the financial relief will lead to a boost in residential property sales in the coming year.
He said this was evident when the first HOC was implemented last year.
“I don’t think this campaign is targeted at speculators, but for general home buyers. People are still getting married, building families and looking to own homes.
“So, for those already planning to make such purchases, now is a good time to do so.”
Although some would still hold off house purchases due to employment uncertainties, Wong said many with stable incomes would seriously consider benefiting from the campaign, adding that the HOC is a much needed catalyst to move the property market.
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