Urban Wellbeing, Housing and Local Government Minister Tan Sri Noh Omar revealed that the proposal on developers offering financing to home buyers is still on the table, despite receiving criticism on its effectiveness to increase home ownership.
In fact, the proposal is being studied by the ministry with the counsel of the National House Buyers Association of Malaysia, the Real Estate and Housing Developers’ Association Malaysia and other non-governmental organisations, said Noh.
“We want to make sure that if we continue with this policy, it will be a win-win situation between purchasers and developers,” he said after witnessing the signing of an agreement between China’s CREC Development (M) Sdn Bhd and Titijaya Land Bhd for a Kuala Lumpur project.
He noted that property developers must agree and follow the terms and conditions provided under the new scheme. To-date, 42 developers have been given moneylending licences.
Noh said in September that developers may apply for a licence under the Pawnbrokers Act 1972 and the Moneylenders Act 1951 in an effort to provide home buyers with more financing options.
Eligible developers can offer up to 100 percent financing, with the interest rate capped at 18 percent per annum for borrowers without collateral and 12 percent per annum for those with collateral. The loan tenure, on the other hand, would range from 10 to 20 years.
Since then, however, the government had been urged to review the policy allowing property developers to lend money to house buyers, citing the scheme’s lack of regulatory supervision and high interest rates.
Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my
