Shareda moots rent-to-own program for affordable housing

KOTA KINABALU: Property developers must no longer just build houses to sell but also help house buyers to own a house, according to Shareda president Chew Sang Hai.

He said the association is looking forward to working with the government to implement the rent-to-own programme (RTO).

He explained that the objective of RTO is to facilitate homeownership especially in the affordable housing segment with an independent capital market structure capable of financing the whole spectrum of the relevant commercial requirement.

Chew also said that a special purpose vehicle or SPV would be set up under the initiative of Shareda.

“The SPV will allow the buyer to have accommodation at market rate rental for five years and also allow them to improve their credit rating and obtain the loan facility within five years.

“Besides that, SPV would allow the buyer to buy the house at a predetermined price,” he said at PropEX 2018.

Earlier in his speech, Chew gave a reason for developers to embark on the RTO, stating that 67 percent of property buyers could only afford houses priced between RM300,000 and RM500,000.

“However, strict loan policy makes it impossible for most to own a house whereby in the first quarter of 2016, only 40 percent of loan applications were approved in comparison to the same period in 2015 at 50 percent,” he disclosed.

Chew also commented on the exhibition, stating that PropEX has been a very important vehicle to stimulate and boost market confidence moving forward as the outcome is important data measurements.

He said that this year, a total of 11,673 units of properties valued at RM35.225 billion are being showcased, of which 4,545 units valued at RM4.855 billion are properties in Sabah while 7,130 units valued at RM30.370 billion are in Peninsular Malaysia.

He added that the properties comprise 21.36 percent commercial property, 78.18 percent residential property and 0.46 percent industrial property.

About 78.18 percent of the overall properties are residential on sale during the expo of which 55 percent are with prices ranging from approximately RM288,000 to RM500,000 per unit.