Glo­mac: No short­age of af­ford­able homes

The Sun (Malaysia) - - SPEAK UP - BY EE ANN NEE

KUALA LUMPUR: There is no short­age of af­ford­able homes in the coun­try, only the is­sue of end-fi­nanc­ing, ac­cord­ing to Glo­mac Bhd.

Its group man­ag­ing direc­tor and CEO Datuk Seri Fateh Iskan­dar Mo­hamed Man­sor ( pix) said loan is still the main con­cern as house buy­ers are faced with end-fi­nanc­ing re­jec­tion and lower mar­gin of fi­nanc­ing of­fered by fi­nan­cial in­sti­tu­tions.

His com­ments di­rectly con­tra­dict Bank Ne­gara Malaysia’s (BNM) state­ment on Tues­day which rub­bished claims that ac­cess to fi­nanc­ing was the main woe for af­ford­able hous­ing buy­ers and in­stead called for res­o­lu­tion of fun­da­men­tal is­sues such as af­ford­abil­ity and the short­age of sup­ply of rea­son­ably priced houses.

“In cer­tain lo­ca­tions, there is a mis­match of sup­ply and de­mand for af­ford­able homes but there is no short­age of the sup­ply of af­ford­able homes any­where,” Fateh told a press con­fer­ence after Glo­mac’s AGM here yes­ter­day.

Fateh is also the Real Es­tate and Hous­ing De­vel­op­ers’ As­so­ci­a­tion Malaysia (Re­hda) pres­i­dent.

But Fateh agreed with the cen­tral bank that the max­i­mum hous­ing loan ten­ure of 35 years is rea­son­able and if the ten­ure is to be stretched, it may strain the bor­rower.

He cited mod­els of other coun­tries where two guar­an­tors are al­lowed to back a loan for five to 10 years. “These mech­a­nisms and what not ... we’ve to look into. It’s been done in Aus­tralia. These are steps that we have to study.”

On the re­cent pro­posal by the Ur­ban Well­be­ing, Hous­ing and Lo­cal Govern­ment Min­is­ter Tan Sri Noh Omar to al­low hous­ing de­vel­op­ers to lend to house­buy­ers to make up for a “gap” in end-fi­nanc­ing of­fered by banks, Fateh said Glo­mac will study the mech­a­nism once the Cabi­net has made a de­ci­sion.

“We don’t have ca­pac­ity to fi­nance 100%. If you say bridg­ing 10%, it’s some­thing that we will con­sider. We want to help the pur­chasers and at the same time we have to be fair to them and can­not be charg­ing (high) in­ter­est.

“No prop­erty de­vel­oper has got the bal­ance sheet to give 100% loan. We’re not fi­nan­cial in­sti­tu­tions. There will be risks and chal­lenges in­volved,” said Fateh.

Mov­ing for­ward, he said, the prop­erty mar­ket will con­tinue to be chal­leng­ing. “A lot de­pends on next month’s Bud­get. We would like to see how the Bud­get could as­sist, es­pe­cially first time house buy­ers. When there’s bet­ter and palat­able fi­nanc­ing given to pur­chasers, it would def­i­nitely help.”

Fateh called for bet­ter end-fi­nanc­ing and bet­ter fi­nanc­ing mar­gins to be given to house pur­chasers, es­pe­cially for first-time pur­chasers and pur­chasers of af­ford­able homes; as well as for lower costs of do­ing busi­ness, which con­sists of com­pli­ance and con­tri­bu­tion costs.

Glo­mac has planned launches worth RM1.05 bil­lion for the fi­nan­cial year end­ing April 30, 2017 (FY17). Its FY17 profit per­for­mance is ex­pected to be un­der­pinned by the com­ple­tion of the land sale in Cheras, as well as un­billed sales of RM512 mil­lion at the end-July.

The group is well placed to cap­i­talise on the sus­tain­able de­mand for landed prop­er­ties with its RM7 bil­lion pipe­line of po­ten­tial projects.

For the first quar­ter ended July 31, 2016, Glo­mac’s net profit jumped four­fold to RM85.54 mil­lion from RM21.07 mil­lion a year ago, sur­pass­ing its FY16 net profit of RM80.9 mil­lion, at­trib­uted to con­tri­bu­tion from the dis­posal of land for RM145.6 mil­lion, as well as progress in its key on­go­ing projects. Rev­enue leaped to RM251.42 mil­lion from RM123 mil­lion in the cor­re­spond­ing quar­ter of FY16.

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