Some years back, a developer in Johor told me this, ‘Many times it is those people with low income that finds it hard to get a loan. The reason is because the banks are very stringent with them.’ That was the major reason why if we would like to help the lower-income households own a home, end-financing is very important. Simply building such units is still not going to enable them to get one because they could not get their loans approved! Another developer told me that for his affordable project of nearly 200 units, he had to sell it 600 times because the buyers just could not get the loans approved and he had to sell the same unit again and again. I think this one reason why PR1MA announced the arrangement of end-financing with 4 banks just days ago.
It was reported recently that PR1MA is looking at assisting buyers further through end-financing which it will arrange with four local banks. They are Malayan Banking Bhd, CIMB Group Holdings Bhd, Ambank Group and RHB Banking Group. Earlier article: Not just building but end-financing as well The total loans that they would be disbursing to the 15,000 first-time home buyers this year would be up to RM5.7 billion. According to Kenanga Research in a NST article, it said as the target for this year involved 15,000 houses at an average price of RM350,000 to RM400,000 per unit with 95 per cent financing, the banks would fork out between RM4.9 billion and RM5.7 billion in new loans. Kenanga also shared that CIMB will acquire the most of the loans. It said, “CIMB’s exposure to the residential property segment is the highest among them, increasing by 13 basis points (bps) since the first quarter of last year, although its average lending yields (ALR) is the highest in the industry, standing at 5.16 in the third quarter of last year (versus the industry’s 4.55 per cent), implying higher appetite for mortgage loans.”
Here’s where you can get information on where the units to be built are as well as to apply for a unit. http://www.pr1ma.my/ Qualification for a unit is as per the image beside. A friend asked me before if he should get a PR1MA unit if he can also get other units from private developer. I think the answer remains the same. PR1MA is just another property that we can buy. Look for the usual reasons to buy and choose the one meeting most of our expectations, regardless of whether they are PR1MA or other units. As for whether these units can double in price in future, let’s just focus on getting a decent home of our own first. On an overall basis, a home will always be a good hedge against inflation. There is no way that majority of buyers can save fast enough while we continue to pay our rental every month. Happy choosing the best, whether PR1MA or other local government or private schemes.
written on 16 Feb 2017
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