PETALING JAYA: Developers are in the business of building, not lending money to homebuyers.
Real Estate and Housing Developers’ Association Malaysia (Rehda) Past President Ng Seing Liong, who said this today, said housing developers would prefer to use the money to build more homes rather than going into the moneylending business.
“We are not Ah Long. Unlike banks, developers are also not allowed to collect deposits from buyers,” he said at the 19th National Housing and Property Summit 2016.
Ng was responding to Urban Wellbeing, Housing and Local Government Minister Noh Omar who announced today that developers would be allowed to provide housing loan facilities to property buyers, effective today.
The interest rate for these loans will be capped at 12 per cent a year for borrowers with collateral and 18 per cent for those without.
Noh added that his ministry was allowing developers to provide housing loans of up to 100 per cent to overcome difficulties faced by buyers in securing bank loans, and sees it as a win-win solution for both developers and house-buyers.
The initiative is open to everyone, including second-time home buyers.
Meanwhile, head of Investment for Axis Real Estate Investment Trust Managers Berhad and immediate Past President of the Malaysian Institute of Estate Agents Siva Shanker said banks should be allowed to do their business while builders should be allowed to focus on building properties.
Furthermore, Siva felt the 18 per cent interest rate was too high.
“That is what credit cards are charging as interest rate.
“The guy who cannot get a loan from banks, because of some bad track record, will end up paying the developer 18 per cent interest rate.
“Is the government making these rules to help the market or penalise the poor?
“The rich guy gets a loan at 4 per cent from the bank and the poor man gets a loan at 18 per cent.
“Isn’t there something wrong here?”
Siva said the government should instead be looking at relaxing lending rules for first-time house buyers by giving additional credit or allowing 100 per cent housing loans.
“A lot of people cannot buy their first property because they cannot afford the down-payment.
“Help them with that. It can be repayable over a longer period.