Calls for easing of some of the lending restrictions and the return of developer interest bearing schemes (DIBS) in Budget 2018 continues even as the central bank has explained that access to financing is not the primary issue affecting affordable housing.
The Real Estate and Housing Developers’ Association Malaysia (Rehda) believe that the various financing guidelines and cooling measures rolled out since 2010 has negatively affected the ability of homebuyers to secure financing.
“You have to look at bank financing and maybe relax some of the criteria in terms of lending restrictions that we have seen in the past. Especially things like DIBS and all that,” said Knight Frank managing director Sarkunan Subramaniam.
“Perhaps DIBS should be brought back, only for first-home buyers in order to assist them. Just a simple policy decision to allow DIBS for first home buyers… that would really help them and help to spur the housing market.”
To address the affordability issue faced by first-time homebuyers, Rehda suggested the introduction of a Home Ownership Assistance Programme (HOAP), in which developers include the interest of the housing loan during construction period to the purchase price.
Rehda said the HOAP should only be restricted to households with an income of RM10,000 and below, property under construction as well as to houses costing RM500,000 and below.
Chang Kim Loong, secretary-general of the National House Buyers Association (HBA), is against the HOAP as it is just a permutation of DIBS.
“Developers being entrepreneurs have to be responsible and bear the risks that come with their investment. They should not be allowed to enjoy profits at the expense of house buyers bearing the risks on their behalf,” he said.
“Thus, when developers claim that DIBS is good because they ‘assist new buyers’, they should be asked to use the built-then-sell 10:90 concept instead if they are sincere in not wanting to shift the risks to the house buyers.”
For its Budget 2018 wishlist, HBA urged the government to continue its ban on DIBS, since prohibiting such scheme proved to be effective in curbing house price increases.
Image sourced from Twitter and BNM.
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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