Get cracking on affordable homes
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.
Thousands of houses still out of reach for many as prices still unaffordable.