Finance & Property News: Minister – Allow Firms To Finance Housing Loans

KUALA LUMPUR: The Urban Wellbeing, Housing and Local Government Minister has proposed that more lending institutions be created to help low-income earners buy homes.

Datuk Abdul Rahman Dahlan said financing licences could be given to companies that had sufficient funds, such as insurance firms and cooperatives.

“The licences will allow these companies to give out housing loans to buyers of low-cost houses,” added the minister, saying that a bigger allocation to build low-cost homes was on top of his wish list for Budget 2015.

Abdul Rahman said it cost between RM130,000 and RM150,000 to build a low-cost house, but these were being sold at only RM42,000 per unit.

“Unfortunately, not many banks or financiers are willing to provide low-cost housing loans for fear that the buyers cannot repay,” said Abdul Rahman.

“But in reality, the loan amount is so much smaller than the value of the house. Surely, the bank should take that into consideration,” he added.

Abdul Rahman said he discussed with Prime Minister Datuk Seri Najib Tun Razak about having more funds for low-cost housing.

“The indications are positive,” he said. “But we will have to wait and see.”

The other item on his list is having more land banks for urban housing.

“The obstacle faced by the Government is buying land for the same purpose,” he said.

“Increasingly, we are facing problems acquiring land and it is becoming very expensive.”

Abdul Rahman suggested that the Government started a fund to buy land in urban or rural areas and keep them for five to 10 years before developing them.

“Investment in land is good,” he said. “Five years down the road, if we decide to build low-cost houses in urban areas, we will have the land set aside to build them,” he said, adding that the practice was being employed by property developers.

Source: the Star Online;
Published on: Thursday, October 9, 2014

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