Get crack­ing on af­ford­able homes

The Sun (Malaysia) - - SPEAK UP -

AFTER so much talk and flak on the burn­ing is­sue of af­ford­able homes, a new start-up named EdgeProp Sdn Bhd has come up with a scheme to help achieve the Pakatan Hara­pan govern­ment’s prom­ise of build­ing one mil­lion af­ford­able homes in the next 10 years.

FundMyHome.com is a peer-to-peer home own­er­ship scheme that matches first­time house buy­ers with fi­nan­cial in­sti­tu­tions. Un­der this unique scheme, house buy­ers need only pay 20% of the prop­erty price and the bal­ance is taken care of by po­ten­tial in­vestors in ex­change for the po­ten­tial ap­pre­ci­a­tion in value of the prop­erty over a pe­riod of time.

Based on a crowd-fund­ing ini­tia­tive that reaches out to Malaysians es­pe­cially those in the so-called B40 cat­e­gory who still find it a trauma fi­nan­cially to buy houses that they can re­ally call their own.

The busi­ness model be­hind the scheme that Prime Min­is­ter Tun Dr Ma­hathir Mo­hamad launched on Sun­day even as­tounded him­self.

“This is a fan­tas­tic scheme which I couldn’t be­lieve ... so I told Tong that the proof of the pud­ding is in the eat­ing,” said Ma­hathir, re­fer­ring to Edge Me­dia Group chair­man Datuk Tong Kooi Ong, the scheme’s brain­child.

Those who know Tong, who owns news­pa­pers like the weekly The Edge and The Edge Fi­nan­cial Daily among other things, are con­vinced that he can de­liver.

Fi­nance Min­is­ter Lim Guan Eng said the crowd­fund­ing scheme, as an­nounced in his Bud­get 2019 last week, is a risk worth tak­ing with both Bank Ne­gara Malaysia and the Se­cu­ri­ties Com­mis­sion hav­ing no ob­jec­tion to it after con­duct­ing their own eval­u­a­tions.

This is ac­tu­ally the best news in a long time for what must be mil­lions out there who have yet to own their first home.

All and sundry, es­pe­cially politi­cians, re­gale them­selves talk­ing about na­tion­build­ing but what is na­tion-build­ing if too many peo­ple don’t have de­cent roofs over their heads?

By and large, we are still way off from ac­tu­ally mak­ing houses that are la­belled as af­ford­able, truly af­ford­able.

In other words, they are af­ford­able only on paper and even Bank Ne­gara in its reg­u­lar re­ports on the hous­ing sec­tor, says so.

The prime min­is­ter, when launch­ing the above scheme, said so too. As he put it: “Thou­sands want to buy a house but thou­sands of houses can­not be bought. They are empty be­cause house buy­ers can­not af­ford them, and banks do not eas­ily lend to peo­ple who can­not pay back.” Now, what’s the so­lu­tion to this co­nun­drum?

Let’s start with the banks. Can they con­sider low­er­ing in­ter­est rates for the so­called af­ford­able homes to make them even more af­ford­able?

The cen­tral bank, which fixes in­ter­est rates, could surely work with banks to see how best this could be im­ple­mented.

We all know that civil ser­vants only pay 4% in­ter­est for their hous­ing loans run by the fi­nance min­istry as there’s a govern­ment sub­sidy on the cost of funds.

Be­fore any­one, es­pe­cially the banks, laugh off this idea of lower in­ter­est rates for hous­ing loans for af­ford­able homes, let’s con­sider the no­tion that even fi­nan­cial in­sti­tu­tions have their cor­po­rate so­cial re­spon­si­bil­ity.

The next step that could be taken is to scrap im­port du­ties on es­sen­tial build­ing ma­te­ri­als for such houses in­clud­ing raw ma­te­ri­als.

The govern­ment at the state and fed­eral level has large land­banks in the out­skirts of towns and cities, and these could be freed or re­leased for con­struc­tion of such houses.

We all know that land is a ma­jor com­po­nent that de­ter­mines the price of houses and if this is taken care of prices can be made more af­ford­able.

Else­where, Malaysia is home to so many bil­lion­aires and multi-bil­lon­aires ... can’t they, too, chip in to build more af­ford­able homes as char­ity or part of their CSR cru­sade?

It’s a fact that bu­reau­cracy or red-tape of­ten adds up to the pric­ing of houses as de­vel­op­ers need to put up with ex­tra hold­ing costs due to late ap­provals that could lead to even cor­rupt prac­tices by those with the ap­proval power.

Ev­ery­thing must not only be done but seen to be done to min­imise this or, bet­ter still, elim­i­nate it once and for all.

Sin­ga­pore is per­haps one na­tion that boasts of the high­est rate of home-own­er­ship by cit­i­zens at well over 80%.

Its Hous­ing De­vel­op­ment Board has been touted as the world’s most suc­cess­ful such agency and it’s some­thing that we can model after or adopt as well.

To our in­dus­try play­ers and peo­ple in the Hous­ing Min­istry, may I ad­vise them to learn from Sin­ga­pore, which is only too will­ing to share their ex­pe­ri­ence and ex­per­tise.

At the end of the day, it all boils down to whether we want to do it or not. It’s all doable. If we don’t, then stop talk­ing about af­ford­able homes.

Com­ments: let­ters@the­sundaily.com

Thou­sands of houses still out of reach for many as prices still un­af­ford­able.

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