property

Effects of the PN and PH manifestos on the property and construction sectors

Will the just concluded 15th General Elections (GE15) affect the property market?

The following is the platform put forth by Pakatan Harapan (PH) and Perikatan Nasional (PN), regardless of who wins or loses. The question is which of the proposals and policies in each party's manifestos is more likely to be implemented.

Should PH win the GE15 and become the next federal government, it pledged to increase the rent-to-own (RTO) programme nationally and to create a sufficient number of affordable homes available for both purchase and rental, said CGS-CIMB Securities

PH also aims to reinstate the RM3 billion fund to guarantee financing homes for first-time buyers of affordable housing, something Rehda has been advocating for years.

In addition, PH planned to give renters of the Program Perumahan Rakyat (PPR) ownership chances, maybe through revisiting the housing financing arrangement.

PPR commonly referred to as the "People Housing Program," is a government initiative to offer affordable housing options for communities with a monthly income of RM2,500 or less.

Further, PH has pledged to expand the role of the housing tribunal to cover tenants and take over maintenance work for low-cost flats.

Bukit Gasing assemblyman Rajiv Rishyakaran and a member of PH's manifesto committee said prior to the GE15 elections that taking over the maintenance of these flats would be costly, but it was not expected to exceed RM1 billion.

Under the PN manifesto, it plans to improve housing financing schemes for B40 and M40 such as RTO and land purchase.

It also intends to offer micro youths affordable rental housing schemes in major cities.

"For both PN and PH manifestos, the plan to increase affordable housing, RTO, and financing schemes will likely benefit developers focusing on products priced below RM500,000, according to CGS-CIMB.

"These measures should lower the barrier to owning a house, which should spur demand for properties in the affordable range," it said in a note today.

CGS-CIMB retains sector-neutral ratings for the construction and building materials sectors ahead of the formation of a new coalition government and a new Prime Minister/Cabinet ministers.

In its pre-GE15 scenario assessment report previously, the firm had included a hung parliament scenario as likely unfavourable (short to medium-term uncertainties) due to several reasons.

"Given the potential formation of a new coalition government, in the short to medium term, we would be keeping an eye on the re-tabling of Budget 2023, the progress of the MRT 3, and whether new mega contract initiatives will emerge or legacy mega contracts would be revived (such as the Kuala Lumpur-Singapore high-speed rail (HSR).

"A new coalition government may review Budget 2023 (to be re-tabled likely on Dec 22). The new government may (also) review (the RM32 billion) MRT 3 Circle Line, which will be due for contract awards in 1HCY23 (pre-GE15 expectations), and the estimated RM8 billion to RM9 billion land acquisition process, which has not commenced

"(Further) sector contract rollout timeline in 2023 may be affected due to the re-tabling and likely changes post-review of Budget 2023," it said.

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