Rent-to-own scheme for People’s Housing Project (PPR)

I remember a senior manager for a developer in Johor who told me this many years ago. He says that everyone should have a home that belongs to them so that they do not continue to face the prospect of ever higher rental or being forced to move every few years. He shared, ‘The reason why low cost units could not be sold is sometimes because the people who wants to buy them could not get a loan. They have no permanent or the typical office jobs but in actual fact, the loan needed for the unit is far lower than the price for such a unit. Banks should be flexible with this.’ I think he has a very good point but I also understood from a senior manager of a recovery department in a local bank that many times, when it comes to recovery, things will no longer be straightforward. It’s very hard to just put the blame on banks alone. There’s always two sides to a coin.
When the majority of the people needing a home has a home, then the property market will be much more stable. It also meant that the supply is not too far away from demand and vice-versa. Many may be renting, like those for the People’s Housing Project (PPR). These tenants may have reason to rejoice. Reported in the media, the Urban Wellbeing, Housing and Local Government Minister Tan Sri Noh Omar said that People’s Housing Project (PPR) tenants will have a chance to own the units through a rent-to-own scheme. Here’s the report in iProperty News. However he said that before these tenants are offered the opportunity, they would be scrutinised first to make sure that they are really the original tenants and the unit was not rented out to someone else. (Frankly, if this is to be done, it better not be announced in advance. Else, the idea is noble but the implementation is not effective or efficient)
Noh also revealed that should these tenants be offered the rent-to-own offer, it is without the need for any deposit. In fact, if the tenant has a good record of payment, the amount paid will be taken into account too. He also shared that as at December 2017, there are already a total of 84,490 units of PPR units nationwide, involving 122 projects. Current rental is RM124 per month while the selling price per unit was RM35,000 for Peninsular Malaysia and RM42,000 for Sabah and Sarawak. (Yes, this price definitely meant it is heavily subsidised.)  There are two categories of PPR. For the first category, the construction cost of the PPR is borne by the federal government but the site (land) is provided by the state government. In the second category, the construction cost and land are provided by the federal government. In this case, the ownership for the first category can be given by the federal government while for the category 2, it would have to be discussed with the state government. Full article in iProperty News here. Happy following. 
written on 15 March 2018
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