‘Beware of developers using platform to dump stocks’
KUALA LUMPUR: The peer-topeer crowdfunding platform, FundMyHome, should be reviewed and monitored to avoid being a tool of property developers to sell their unsold products at higher prices.
FAR Capital Sdn Bhd chief executive officer Faizul Ridzuan said although it was innovative and creative, FundMyHome could pose a negative impact if not properly managed.
He said properties in the scheme should be closely monitored so that it would not be a means for developers to dispose of their non-performing stocks while marking up prices.
“Based on the properties listed in FundMyHome, we find that there are properties that are ready for sale at a more expensive price than the secondary market.
“For example, condominiums in Equine, Seri Kembangan, are being priced lower than RM270,000 on famous property search sites. However, on the FundMyHome website, it (the same property) starts at RM345,000. In this case, the house was 20 per cent more expensive than the market price.
“We can see here that developers are trying to sell these unsold stocks at the price they want,” he told NSTP Business.
An NSTP survey on a property search page to compare the same property prices listed at FundMyHome had found Faizul’s claim to be justified.
Faizul said the scheme also had the potential to increase nonperforming loans (NPLs). He said the situation mirrored the subprime mortgage crisis in the United States.
“If all the properties included in the scheme are of Type A and B grades, and are really profitable, these properties can be sold to repay investors who provide 80 per cent loan to buyers.
“However, if the real estate bought today at RM350,000 and fall to RM270,000 over the next five years, this will burden homebuyers and investors in the scheme. Developers are still safe because they already get 20 per cent from the start,” said Faizul.
He said the scheme could also mistreat “poor” buyers.
“This scheme requires 20 per cent deposit and on average based on the displayed property, a buyer needs at least RM60,000 to RM80,000.
“Most likely, the buyer will make a personal loan solely to make a deposit of RM60,000 to RM80,000. The government’s efforts and intentions are right, but it’s a concern if the results are different later.
“It’s better to find a good real estate agent and ask them to find a house that does not require high capital to buy.”
Under FundMyHome, buyers have the option of selling or continuing to reside in their house after five years.
Those who choose to reside can refinance their home through FundMyHome.com or bank loans.