REAL Estate and Housing Developers Association Malaysia (Rehda) estimates sales of 120,000 houses in the RM180,000 and below price bracket over the next 12 months given the incentives offered in the latest economic package.

''Based on these projections, the multiplier effect of these transactions will translate into an estimated 2.46% of total gross domestic product (GDP) for 2003.

Datuk Jefrey Ng

''Similarly, the development of 150,000 medium cost and affordable houses by Syarikat Perumahan Negara Bhd (SPNB) over the next five years will have an annual multiplier effect of about 0.4% on the GDP,'' its president Datuk Jeffrey Ng told a press conference on Rehda's response to the government's economic package in Petaling Jaya yesterday.

Based on National Property Information Centre (Napic) figures of a total overhang of 59,000 residential units, Ng said 43,000 units were in the category of RM150,000 and below.

He expects the overhang to decrease significantly over the next 12 months based on a projection that about 30,000 units in the RM150,000 and below category would be sold. This is in addition to the 4,400 units that SPNB is expected to buy under the economic package.

Ng said the package, which focuses mainly on houses costing RM180,000 and below, would benefit the majority of house buyers as this sector represents about 80% of the housing market.

''The Home Ownership for the People (Hope) programme and the stamp duty translate into significant savings for house buyers but obviously that would depend on the individual's tax bracket.

''For purchases made within one year from June 1, 2003 to May 31, 2004, house buyers will save up to RM4,200 in interest payments and stamp duty,'' Ng said.

With the exemption on real property gains tax (RPGT) for one year, Ng said, existing home-owners with properties which had appreciated significantly could also consider upgrading.

''For owners who enjoyed a good appreciation in prices for their current houses, this measure allows them to move to a better house without having to fork out extra money in the process,'' he said, adding that the exemption of RPGT was also valid for commercial units.

Ng noted that the package had measures to promote home ownership and improve quality of life.

These include the development of 150,000 units of affordable housing by SPNB, allowing owners of low-cost houses to sell their homes after 5 years to upgrade, the purchase of unsold apartments by SPNB to be rented to government employees or their widows and single mothers, and upgrading the exterior and improving facilities of government-owned low-cost flats.

Source: The Star