PETALING JAYA -While the debate on affordable homes centred on supply initially, the focus has shifted as agencies in charge of these schemes are now turning to policymakers and Bank Negara Malaysia to help house buyers secure loans.
Ironically, having low disposable income helps prospective buyers secure the affordable housing in the first place, but it works against them when it comes to securing loans from financial institutions.
The Selangor Housing and Property Board (LPHS), for one, hopes there will be more flexibility given to first-time homebuyers, with the debt servicing ratio based on gross income and not net income.
“We expect Bank Negara will do something because right now almost everyone cannot sell their houses. PR1MA (1Malaysia People’s Housing Programme) is facing the same problem, not just us (Rumah Selangorku),” LPHS executive director Norzaton Aini Mohd Kassim told SunBiz in a recent interview.
“People want to buy. It’s just that they can’t get loans,” she said.
Owing to Malaysia’s high household debt, Norzaton said, previous discussions with Bank Negara did not bring about any positive outcome. The country’s household debt stood at 89.1% of gross domestic product (GDP) in 2015.
Nevertheless, in view of the slowdown in the country’s economy, she opined that the central bank may relook at ways to boost the property market.
Bank Negara did not respond to queries as at press time.
When contacted, PR1MA told SunBiz that it is constantly in discussions with all the relevant regulators, including the Ministry of Finance as well as Bank Negara on matters concerning end financing. “We hope from the feedback given, the government would be able to come up with a suitable solution for this issue,” it said in an email reply.
Rumah Selangorku houses are priced up to RM250,000 each, while PR1MA homes are going for up to RM400,000.
To address the difficulty in obtaining housing loans, PR1MA has come up with a special initiative to provide easier financial access to potential PR1MA home buyers, known as the PR1MA Home Buyers Assistance Programme. The programme consists of three main components – end-financing of up to 110%, rent-to-own and an insurance plan known as CARE by PR1MA.
PR1MA said there are various reasons as to why potential home buyers are unable to secure loans, including low disposable income, failure to provide complete documentations required by banks and overdue National Higher Education Fund Corporation (PTPTN) loan repayments.
PR1MA is working closely with PTPTN by providing a special counter during its unit selection events, which serve as a one-stop-centre to aid home buyers who are blacklisted due to their student loan defaults.
Without specifying the initiatives that should be introduced, PR1MA stressed that affordable housing is among the areas that is being given special attention by the government. “In view of this, we hope the government would come up with a suitable programme to address issues on end financing,” it said.
A property analyst who declined to be quoted, however, does not support the proposals by the developers, such as the reintroduction of the Developer Interest-Bearing Scheme (DIBS), and allowing more withdrawals from the Employees Provident Fund, among others.
“It will only solve the short-term problem, but it will create a long-term issue. It’s not about whether they can relax or not, but it’s about buyers’ profile,” she explained.
The analyst suggests that the government come up with more rent-to-own projects for those who can’t afford to buy houses at the moment. “When the salary goes up, they might want to consider buying the house. This is good because you don’t force people to commit first. When they have more money, then they can buy from the government,” she said.
Although DIBS was banned in 2014 to curb property speculation, she pointed out that there have been similar schemes promoted by developers, such as the Developer Interest Sharing Scheme (DISS).
“You look at SP Setia’s 10:90 scheme. Isn’t it DIBS? Developers are doing it even though DIBS was banned. Of course, with this kind of schemes, they charge you higher, then they give you rebate during the construction period, so what is the difference?” she asked.
An analyst at PublicInvest Research said it could be possible to reintroduce schemes like DIBS, but it should restructured to only suit to first-time home buyers. “It can’t be the previous DIBS, there should be certain terms and conditions.”