The rakyat are now forking out more for basic necessities such as food, utilities and petrol and prudent consumers will think twice, even thrice, about making property investments. Unless the government intervenes, the property market is likely to remain soft.

Focus is now on Budget 2009 to be announced next Friday and the industry is hoping that some, if not all, of the five-point Budget 2009 Memorandum submitted to the Ministry of Finance in April will be adopted.

It was mooted by the Real Estate and Housing Developers’ Association (Rehda) to promote homeownerships and investments in the industry which needs reviving.

Rehda president Datuk Ng Seing Liong explained it is not against the Bumiputera quota policy by advocating that the quota be maintained at 30 per cent and the Bumiputera discount be capped at five per cent – and only for houses costing RM250,000 and below, excluding low- and medium-cost units. He is appealing for this to be made a national policy.

It also proposed that the states allow the early release of unsold Bumiputera units six months after a project launch.

Ng said the government should create special purpose vehicles to develop low-cost public housing instead of burdening private developers, adding that it be constructed on state alienated land and not private converted land.

Kumar Tharmalingam, a former president of the International Real Estate Federation (Fiabci)’s Malaysian chapter, wants the withholding tax for Real Estate Investment Trusts (REITs) to be removed. He said the local REIT market is in the doldrums because of this tax and if removed will likely see more investments in REITs.

He acknowledged that the escalating building material costs have caused some developers to be wary of starting new projects and hopes Budget 2009 will have provisions to help mitigate the rising costs.

He agreed that the government should come up with measures to restore confidence in the lacklustre market, noting "there are enough houses being built but we need to find ways to make them affordable for the masses".

Tharmalingam opined that there should be more building societies to provide residential mortgages as they offer better rates than financial institutions.

Lawyer Nicholas Chang said the government can help to stimulate greater interest in the market by waiving or at least reducing the stamp duty on property transfers.

There was a 50 per cent waiver for houses costing RM250,000 and below in the previous national budget and Rehda’s latest memorandum also proposes a reduction in stamp duty rates.

"Properties costing RM700,000 and above are selling well," said Chang, explaining that high-end buyers are not as affected by the price hikes as middle-income consumers. Another lawyer Elsie Yeoh, lamenting the high cost of homeownership, hopes the government will make it more affordable.

"We should have tax deduction on housing loan interests although that need not be across the board. The rich don’t need it but those in the middle-income bracket such as myself will benefit. I’d be happy if it’s for properties costing below RM300,000!"