KOTA KINABALU, Sept 15 — Stricken by a property slump that has seen property output plunge as much as 80 per cent in the last two years, the Sabah property industry want measures and subsidies put in place to help stimulate the market.

The Sabah Housing and Real Estate Developers Association (Shareda) president Datuk Francis Goh said production is declining with the industry churning out less than RM1.5 billion worth of projects this year compared to RM4.6 billion in 2014 and RM7.56 billion the year before.

He added that the slump has placed some 165 related trades in limbo.

“The recent economic downturn and weak market has greatly affected the state’s economy,” he said in a letter addressed to Prime Minister Datuk Seri Najib Razak.

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Goh stressed that Sabah’s property market faces the added burden of higher building costs due to the long standing cabotage policy imposed on the state’s imports — which account for 80 per cent of its construction equipment and materials.

The situation is not helped by what he described as high capital expenditure for utilities and the inflated price of raw building materials caused by local monopolies that drive prices up by as much as 20 per cent compared to the Peninsular, he added.

Goh noted that all this piles on nationwide industry concerns like the recent implementation of the Goods and Services Tax (GST), Real Property Gain Tax (RPGT), abolition of the Developer Interest Bearing Scheme (DIBS), and stringent bank lending policies.

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“In an environment where the average income per capita is the lowest and poverty in the country and yet subject to such high cost it just does not add up,” he said.

Goh urged Putrajaya to consider introducing subsidies or compensating the difference for logistical arrangements from West Malaysia, standardising utility contribution throughout the country and take action against unfair “cartel style” business practices to even out the playing field.

He also proposed that the federal government compel Bank Negara Malaysia (BNM) to urge all banks not to be too stringent with financing approval for first-time house buyers.

“In line with the National policy, Bank should be compelled to support properties that are sold below RM500,000 for first-time buyers.

“For properties of RM500,000 and below, first time buyers should be entitled to apply for a two-year subsidy to its service charges.  This will effectively provide the purchaser with sufficient breathing space to plan and recoup from their initial commitment and spare fund for moving in.

“This would therefore promote ownership to the mass from mid to low income group meeting the vision of having a roof over everyone’s head by 2020,” he said.

To boost foreign investments, Goh suggested a subsidy or special funds to support major tourism developments, by giving consideration to duty-free status requests, simplifying the “Malaysia My Second Home” mechanism and reduce the foreign minimum property value cap from RM1 million to RM800,000.

“This will help to propel Sabah’s economy, driving international attention to local properties,” he said.

Goh also proposed the reduction of RPGT rates and to reinstate the end financing for DIBS projects for residential properties valued at not more than RM500,000 to boost the industry’s growth nationwide.

Prime Minister Datuk Seri Najib Razak is scheduled to table the 2016 budget in Parliament in October.

He had via social media invited the relevant industries and people to give their suggestions by submitting them to his website before September 15.