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“Risk worth taking” to get a home of our own?

This article was in “Peer-to-peer money lending for homes a risk worth taking, says finance minister.” Finance Minister Lim Guan Eng says that the government will only proceed with peer-to-peer crowdfunding to help first-time home buyers only after all factors are considered. He added that Bank Negara Malaysia and the Securities Commission (SC) have conducted their own evaluations and have not objected to it. He said, “So I would say that we would not be approving this until all factors are considered, but definitely we welcome the concerns. We got to go to the mechanics in the SC. The important part is the exchange platform. That is the critical point. So once that is done, everything else follows.” Once this scheme becomes a success, it would raise the bar on large-scale home ownership.
He added that this scheme is part of the government’s promise of 1 million affordable homes for Malaysians. As for the approval by both the Bank Negara and Securities Commission for rollout to the public, Lim hopes the peer-to-peer scheme will be approved for rollout by early next year. As for the criticisms from the Home Buyers Association (HBA) on the peer-to-peer scheme which said that it may lead to the possibility of a mortgage crisis due to too-easy financial aid given, Lim said he will be meeting with the HBA soon. He added, “If the HBA is not concerned, and just taking two paragraphs from my statement, then there is something wrong with them.” Full article in MalayMail here. 
Regardless of the scheme being offered, the risk factor mentioned here should not only be for the buyer of the said property. It should include the risk to the property market as well. Bank Negara Malaysia has always been vigilant and asked banks to exercise responsible lending. Cooling measures were also implemented so that property bubble would not start building and eventually leading to a burst. At the moment, we are doing just fine. BNM said in an article in TheStar here. “In the household sector, new household borrowing remained high quality with about three-quarters of new loans approved given to borrowers with debt service ratios of less than 60%.”  Happy waiting for SC’s approval on the process then.
written on 4 Nov 2018
Next suggested article:  Lending to everyone is not helping the borrower actually

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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  1. The issue should be how the Government can help the market to lower the cost of affordable homes and not to help buyers buy something they really cannot afford.
    Government can help by :
    1. Alienate out lands or air rights above all MRT/KTM/bus stations at nominal sum but no other properties except afforable homes.This will reduce number of costly carpark to be built and captive market for public transportation.
    3. There are many old public housing flats and these are at prime location now. Govt should demolish them and build more affordable homes on them instead of privatising them. One good example is the Cheras flats, which was privatised to SP Setia.
    2.Templates of affordable homes, like HDB to save costs.No pools , etc, just pure homes.
    3.All utilities companies to pay the capital costs.
    4.Use back JKR etc as the consultants instead of private sector consultants.
    5.Offer the construction contracts on open tender including efficient foreign ones who can bring in technical expertise and funding.
    It is so easy to reduce the costs if only the Govt. wakes up and realise that they need to drive the process instead kept pestering the private developers.What is GLCs like Sime Darby, UEM etc doing crowing out the private sector? They should be the ones driving and leading the agenda of reducing the cost of affordable homes,which I believe they can.

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