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REHDA Urges Banks To Expand Financing For Homebuyers

The Real Estate and Housing Developers’ Association Malaysia (REHDA) along with its research arm, REHDA Institute, has called on financial institutions and banks to expand their financing to help improve homeownership among Malaysians.

REHDA President Datuk Soam Heng Choon noted that loan approval issues continued to be one of the top homeownership challenges faced by Malaysians, reported The Malaysian Reserve (TMR).

This comes as financial institutions remain very risk-averse, employing too stringent criteria during assessment to the detriment of prospective homebuyers.

“The government has provided various assistance under Budget 2022 and the 12th Malaysia Plan (12MP), but we feel this issue requires a comprehensive and holistic approach,” said Soam as quoted by TMR.

He said that the association has met with Bank Negara Malaysia and the Ministry of Finance “to discuss the issue of loan approval among homebuyers”.

“We urge financial institutions to expand step-up financing and other alternative financing outlined by the government under the budget and the 12MP.”

Soam pointed out that people eyeing to acquire their first home or home upgraders who are employed in certain sectors which remain significantly affected by the COVID-19 pandemic are unable to achieve their dream of owning a house due to their inability to secure a loan.

“Hence, those whose income was still affected due to the pandemic such as the underemployed and unemployed, as well as those whose income have reduced and those working in the gig economy due lack of proper documentation, find it challenging to obtain a loan,” he said.

“The above could be due to the financial institution’s risk committee imposing more stringent valuation on new property launched and also the secondary sub-sale market.”

Soam revealed that REHDA has suggested various initiatives targeted at improving home ownership such as the extension of the Home Ownership Campaign (HOC) as well as the expansion of the Rent-To-Own (RTO) initiative.

The RTO scheme should be accelerated to enable more people to become homeowners, while the HOC’s implementation must be continued to allow potential home buyers “that have missed the boat” to acquire a home once their jobs and income improve, he said.

Meanwhile, Datuk NK Tong, Deputy President of REHDA Malaysia, said the recent movement restrictions have affected the sentiment of home buyers, with most of them being “less optimistic with a wait-and-see approach”.

According to him, most home buyers in Malaysia are waiting for more certainty on the country’s economic recovery.

 

“We have yet to see whether the economic growth will continue in 2022 and whether it will be back to pre-pandemic economic growth as per 2019,” he said as quoted by TMR.

“However, we have trust in the government that they will do what is necessary to improve the broader economy, reducing underemployment, reducing unemployment, and over such a period, more home buyers will have better ability to commit home ownership.”