BY Roznah Abdul Jabbar
House buyers do not need a new scheme to aid them in owning a home as there are many existing schemes which are underutilised, said secretary general of National House Buyers Association (HBA) Chang Kim Loong.
Responding to a recent news report on the expectation of yet another scheme during the tabling of Budget 2017, Chang said HBA feels that there are already too many schemes introduced in recent years by the government.
“There will be a new scheme introduced every time because the previous schemes were not well thought out,” he said.
He said house buyers are confused as to which of the present schemes can help them purchase a home.
Second Minister of Finance Datuk Johari Abdul Ghani said last week that the government is expected to announce a new scheme during the tabling of Budget 2017 in a move to facilitate loan transactions between first-time house buyers and banking institutions.
He said his ministry is currently collaborating with Bank Negara Malaysia, Malayan Banking Bhd (Maybank), the CIMB Group, RHB Bank Bhd and the AmBank Group to study the best mechanism in implementing the scheme.
Johari said the scheme is aimed at helping first-time house buyers, especially young graduates, or those who have just started work, to get a full loan for the purchase of houses priced below RM300,000.
“Sometimes, the government would provide a deposit of RM30,000 (under the MyDeposit Scheme, First House Deposit Financing Scheme) for houses priced RM300,000, but the applicants still need to borrow RM270,000 whereas banks can only give a loan of RM200,000 according to their monthly wage. Thus, this is where we come in to help,” Johari said.
Chang said the government seems to be unclear about the target that needs to be achieved in helping the rakyat own a home.
Referring to the MyDeposit Scheme, he said there is no point in aiding house buyers pay the deposit as one should have the funds to pay the deposit at the very least.
The scheme, announced in Budget 2016, was implemented on April 6. Under this scheme, first-time house buyers from households with a monthly income of between RM3,000 and RM10,000 will receive a contribution of 10 per cent of the sale price or a maximum of RM30,000 (whichever is lower) to help them buy units priced at RM500,000 and below. A total of RM200 million has been allocated for its implementation.
It was reported that economist Muhammad Ridhuan Bos Abdullah said that although the new scheme is a good initiative by the government, it would serve little purpose if the first-time house buyers could not find suitable units to buy.
He said the main issue is not the financial assistance but the number of affordably priced houses available for the target group. Ridhuan, who is a senior lecturer at Universiti Utara Malaysia’s School of Economics, Finance and Banking, said the government should first look into increasing the supply of affordably-priced houses in view of the high demand for such units.
“It’s better to resolve the core issue first before introducing other (helpful) mechanisms or strategies,” Ridhuan said.
“The government should not be overzealous in promoting homeownership. Instead, they should be educating the public to balance the risk between buying and renting,” Chang said.
He said owning a home is a riskier proposition for households compared to renting. Buyers take on enormous debts, sign multi-year loan agreements and become responsible for homeowners’ cost of their homes.
Chang said scores of low-cost housing project schemes and funding plans have been introduced in Malaysia in the past five decades.
“Information on low-cost projects, those under construction or planned by various low-cost housing providers, state economic agencies, federal bodies and funding schemes should be made available to the public in a database.
“This will allow individuals to learn about the availability of affordable housing in their communities and the financing options available,” he said.
Another important point that Chang noted was the unavailability of a single entity to collect and coordinate information to provide to potential house buyers.
“It seems that the local councils and land offices have their own respective directives from their state governments to impose a mandatory ‘low-cost housing’ category. Have they been overzealous in carrying out the directives?
“Has anyone made a last count of low-cost units that are available in the market? Has there been overhang of such properties?” he questioned.
Among the schemes that were introduced in recent years are My First Home Scheme (MFHS) and 1Malaysia People’s Housing programme (PR1MA), which were initially applauded but hopes have since diminished because of the ambiguity of these schemes.
Chang said the implementation of these schemes has been rather poor.