As an effort to offer flexibility to first-time home buyers, the government is discussing with the Employees Provident Fund (EPF) to increase funds in the second account to 40% from 30%.
The secretary-general of the National House Buyers’ Association (NHBA) Chang Kim Loong says that the proposal by the government is a good move if it would scrap the idea of its previous suggestions to enable property developers as “money lenders”.
“We have no objections to the government’s suggestion or the move, but in lieu of the previous suggestions to enable housing developers as money lenders.
“We are still of the stand of disagreeing to allowing property developers to turn into money lenders. Imagine the house buyers who have to owe both sides. They will end up in deep trouble! But I have a feeling that the government will go on as planned,” says Chang.
He says increasing the funds in account two can be done as long as proper calculation and monitoring is done to ensure that EPF contributors (account holders) have enough to spend during the retirement days.
“As of now, some of the moves the government has carried out are worrying especially when it withdrew from its own pocket to help first-time house buyers with downpayment under the MyHome project.
“But the government did not think about how the house buyers would be able to afford paying for monthly instalments as they do not have the means to afford houses at that price in the very first place.
“The government should stop encouraging people to buy property when then cannot afford or do not have means to maintain loans in a long run,” says Chang.
Chang adds that all these moves by the government if not thought through carefully, may end house buyers in deep trouble as they may be stuck in piles of debt.
“It is very simple, our advice is that if you don’t have enough money to buy a house, don’t buy. For me, if you can’t come up with down payment don’t even think of buying a property because you still have to think about all the installment fees and maintenance fees.
“Most people just want to buy but they don’t think about what follows after making that move and that is how a lot of property buyers end up in piled-up debts and unable to repay them,” says Chang.
In comparison to renting a property, Chang says the dynamics are very different and involves less risk.
“For example, if you are transferred to another state for work, if you are only renting you can just pack your bags and rent another property at your next destination.
“But if you have tied yourself down, having purchased a property, you can’t just leave it and go. There are consequences you have to face, how will you repay while you are gone and what will you do if you are given no choice over the work transfer?” he says.
Meanwhile at an EPF branch in Kuala Lumpur, officers have stated that the proposal has not materialised and that they have not received orders to disseminate information regarding the funds increment.