Affordability and “Accessibility” are two different things.

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Just the other day someone mentioned that if only there is a scheme where potential buyers really do not need to worry about down payment, about bank mortgages or about paying high rental rates just to own it many years down the road. He said that this will mean that homes becomes affordable to all Malaysians. I disagree yeah. I think if all these things happen, then the correct term for the potential owners would be accessibility. Briefly, it meant that everyone has access to buy a property. It does not mean the property is affordable. In fact this accessibility will not be that awesome for the market. Three reasons as below.

#1 – The time when anyone and everyone can buy a home is a potential risk. Let’s never forget the reason why the 2008 Mortgage crisis happened. The main reason was because everyone was buying a property with the thinking of flipping, regardless of whether they could afford it. not was sheer greed all around. Banks meanwhile just lend, lend and then landed in hot soup in the end. Meanwhile not much reining in happened from the authorities until it was too late. Today, the Federal Reserve is more vigilant I think. It was even criticised by its President. (Article here)

#2 – Prices will usually be rising faster than usual. You see, if I have to save for my down payment, it will take time and when I buy later on, even if I could afford a slightly higher price, the home prices will rise slowly. I saved that chunk of money and no one is going to just get it from me easily. However, if I do not have to save at all and I could just immediately buy, I could choose a home which is slightly more expensive than what I should buy. I will easily agree to the home price, without much negotiation because I could buy without any down payment or loan! Not good for the market yeah.

#3 – Why must there be unfairness to the deserved owners? One major reason for the current issue is also because people are just spending everything they have into everything they like / want. Come on, why are we punishing those who chose to skip the RM15 latte and opt for a kopi-O of RM1.50? Why do we punish those who buys an unbranded handbag versus another who bought a RM5,000 handbag? There are also those who chose not to go for expensive vacations and saved the money for a downpayment and more. I really do not understand why must we keep helping the ones who have spent EVERYTHING and still shout for help…

Let’s understand that affordability means someone buying a place slightly smaller, slightly further than what he liked but he could afford. Affordability is also when someone is willing to save for a few years and then buy a property and later on upgrade into a better one a few more years later. Affordability is also when developers, the authorities and the banks do their part to ensure the starting price, the taxes and even the interest rates are skewed a little to help those who really need them. Affordability is definitely not when everyone can just buy a property without any savings at all. That’s merely accessibility. Happy understanding.

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