The federal government announced during the tabling of Budget 2019 on Friday (2 November) that it will introduce a “property crowdfunding” platform by Q1 2019 to help Malaysians buying their first homes, reported Bernama.
On Sunday (4 November), Prime Minister Tun Dr Mahathir Mohamad said the scheme is the first of its kind in the world, and will enable people to buy a home as long as they can a pay the 20 percent down payment, which can be financed via savings, debts or withdrawals from their Employee Provident Fund (EPF) account. The remaining 80 percent will be funded by investors via peer-to-peer lending supervised by the Securities Commission.
“They can borrow money from banks and the money will be their contribution for the purchase, just 20 percent of the price of the house, the balance (of 80 percent) will be bought by investors.”
Dubbed as FundMyHome.com, the property crowdfunding platform is expected to help the Pakatan Harapan administration fulfil its election promise of one million low-cost housing within 10 years.
“One million is not a small number for houses, but this is our promise,” Mahathir reiterated.
Asked about how the government will protect investors and prevent people from reneging on their debts, the Prime Minister believes the risk is low.
“The amount to be borrowed is very small, so banks of course must use prudence in lending money, but because this involves only a small amount of money, the borrower (is likely to) have sufficient income to pay back the loan.”
“The danger of people running away, not paying…if they run away, the house is empty, so you can occupy the house,” he explained.
Nonetheless, the success of the property crowdfunding platform will depend on its results. “I want to see the house, I want to see the owner…if this works, then more people will be able to buy houses and more can be built,” said Dr Mahathir.
While Finance Minister Lim Guan Eng admitted that there is some risk involved, he said it is worth it if it can help the new federal government construct 1 million affordable homes in 10 years.
“When this idea was brought forward we spent quite some time to study in detail because the prime minister liked the idea and we found out that it is workable,” he said, adding the government is holdings talks with relevant agencies like the Securities Commission on how to implement the property crowdfunding platform.
Image source: Astro Awani
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