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No property bubble, help the first-time home buyers

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I subscribe to the belief that every Malaysian should own the home they live in. Earlier article here: Own a property and stop poverty . Of course, we need to do this responsibly instead of jeopardising the whole real estate industry by simply lending to everyone who may not qualify. Overhang units show that there are currently a total of 40,916 units (residential including serviced apartments and small-office-home-offices) worth RM27.38 billion. Overhang units refers to units which are completed but remain unsold nine months after obtaining certificates of fitness. A lot of measures have been implemented to help these first timers but here’s another suggestion from a prominent property guru.

Article in NST here. Previndran Singhe, the founder and chief executive officer of real estate firm Zerin Properties said that banks could help to improve the market situation by lowering interest rates for housing loans, especially for first-time home buyers. This will help to reduce the current oversupply in the country. He said, “Demand of real estate is impacted by interest rates as a proxy to liquidity. Cheaper loans would create more fund affordability and availability in the market, spurring it further. Fundamentally, home-ownership has been the key to wealth accumulation and social upgrade of the population.

He said cheaper loans will make the market more affordable. He also said loans should be around 1-2% which is low enough but banks could still make money. “At present, developers, contractors and consultants take the brunt of providing low-cost houses. Banks, whose clients are developers, do not. We are suggesting that GLC (government-linked company) banks making RM5 billion to RM6 billion a year allocate, say about RM500 million of the profit, to a fund from which loans are given out to first-time buyers of properties below RM500,000” added Previndran. Article in NST here.

As long as the target is first-time home buyers, more effort is needed. As a Malaysian, I would hate to see a fellow Malaysian struggle to pay his monthly rental after his monthly income has stopped. I also think maintenance is the most important factor. We can build cheaper homes, apartments without much facilities (just like Singapore’s HDB) but we need to have strict enforcements on people paying their maintenance fees on time for the benefit of everyone in the whole development. The Home and Local Government Minister said this is part of the plan. Earlier article here: Maintenance is key. KPKT has a plan One more thing which needs to be done is also to provide sufficient education to the masses, that will help a lot too. Happy following.

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Article written and edited by Charles. News article summarised by Dina Batrisyia.

written on 19 MArch 2019

Next suggested article: Can maintenance fees rise continuously

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