Moneylend­ing pol­icy re­view – no de­ci­sion yet

> No new de­vel­op­ments since closed-door meet­ing with min­istry, say stake­hold­ers

The Sun (Malaysia) - - SPEAK UP - BY EVA YEONG

PETALING JAYA: The Ur­ban Well­be­ing, Hous­ing and Lo­cal Gov­ern­ment Min­istry is still un­de­cided on the re­view of a moneylend­ing pol­icy for prop­erty de­vel­op­ers al­though it has been over a month since the idea was mooted.

On Sept 8, Ur­ban Well­be­ing, Hous­ing and Lo­cal Gov­ern­ment Min­is­ter Tan Sri Noh Omar said el­i­gi­ble prop­erty de­vel­op­ers can ap­ply for money­len­ders li­cences un­der the Money­len­ders Act 1951 (Amend­ment 2011) to pro­vide loans to prop­erty buy­ers.

Even though the Act has been around for a while and a few de­vel­op­ers al­ready have the li­cence, Noh’s pro­posal – mooted as a so­lu­tion for af­ford­able-home buy­ers who were un­able to get loans – ran into strong op­po­si­tion from var­i­ous quar­ters.

At present, the Act en­ables those with the li­cences to of­fer loans with in­ter­est rates of up to 12% a year with col­lat­eral and 18% a year with­out. It is un­der­stood that prop­erty de­vel­op­ers who al­ready have moneylend­ing li­cences are of­fer­ing loans at an in­ter­est rate of 8% a year.

Fol­low­ing a Cabi­net meet­ing, the min­istry was in­structed to re­view and fine-tune the pol­icy to make it more ef­fec­tive in help­ing house buy­ers.

The min­istry then or­gan­ised a closed-door meet­ing on Sept 21 to gather feed­back from var­i­ous in­dus­try stake­hold­ers.

“Dur­ing the meet­ing, we spoke out against it, we pre­sented our views, but they have not come back to us yet. There have been no new de­vel­op­ments on this,” said Na­tional House Buy­ers As­so­ci­a­tion sec­re­tary-gen­eral Chang Kim Loong.

While it is en­vis­aged that the pol­icy will be re­viewed af­ter be­ing brought into the spot­light by var­i­ous stake­hold­ers, it looks to be tak­ing time due to the com­plex na­ture of the is­sue.

In the meet­ing with stake­hold­ers, for ex­am­ple, per­ti­nent is­sues raised in­cluded a cap on in­ter­est rates of­fered, the of­fer of loans with­out col­lat­eral and loan re­jec­tion rates as well as the risk of de­fault and fore­clo­sures. Ques­tions were also raised about bor­row­ers’ abil­ity to ser­vice two loans – one from the bank and one from the de­vel­oper.

Just two days ago, Bank Ne­gara Malaysia is­sued a state­ment on the need to de­velop al­ter­na­tives to home own­er­ship be­ing a pol­icy pri­or­ity, ex­tolling the risks of ac­cord­ing fi­nanc­ing to those who can ill af­ford it. Al­ter­na­tives men­tioned in­cluded a well-func­tion­ing rental mar­ket.

On the other side of the di­vide, how­ever, prop­erty por­tal Prop­er­tyGuru said hous­ing loans play a big part in the home own­er­ship process.

“But let de­vel­op­ers de­velop and banks be banks. Typ­i­cally, de­vel­op­ers do not wish to be­come fi­nanciers as it ties up cap­i­tal that can be used for pur­chas­ing land and de­vel­op­ing projects.

“But this idea is symp­to­matic of just how se­ri­ous the lack of fi­nanc­ing and the high rate of loan re­jec­tions have be­come. It is im­per­a­tive we help buy­ers get loans, with­out which home­own­er­ship will re­main a dream for many, es­pe­cially Gen Y which com­prise about 38% of our pop­u­la­tion,” Prop­er­tyGuru Malaysia coun­try man­ager Shel­don Fer­nan­dez said in a state­ment yes­ter­day.

The prop­erty por­tal sug­gested sev­eral mea­sures to aid first-time home buy­ers, in­clud­ing in­creas­ing plot ra­tios, as­sess­ing loan el­i­gi­bil­ity based on gross in­come, ex­tend­ing loan tenures to 40 years, al­low­ing de­vel­oper in­ter­est bear­ing schemes for first-time buy­ers and tak­ing an­other look at in­ter­est rates.

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