PETALING JAYA: The Real Estate and Housing Developers Association (Rehda) is backing the Urban Wellbeing, Housing and Local Government Ministry’s controversial moneylending licence initiative to allow developers to offer housing loans to buyers because 70 per cent of buyers fail to obtain end financing from banks.
The association members are also willing to extend lower interest rates to buyers even though the government allows property developers to charge between 12 and 18 per cent under the Moneylenders Act 1951 (Amendment 2011).
The association’s President F D Iskandar said the association supported the initiative as the number of rejections for end financing was high.
“It should be for first-time property buyers or those upgrading their property for the first time. It should also be for those buying property below RM500,000 only.
“Buyers do not have the ability to come up with the initial 15 to 25 per cent deposit.
“It is a noble move by the ministry and buyers need help to bridge the gap that is not provided by the banks,” he said during Rehda’s media briefing on the property market at its headquarters in Kelana Jaya here today.
However, he said developers would only be able to offer the down payment to buy a house.
“No 100 per cent loan to house buyers. No developer can afford that.”
He said the association would propose a 2 per cent increase on top of the total development cost, instead of the 12 to 18 per cent allowed by the ministry.
“The interest rate may come down by half the rate allowed by the government. We are discussing it now. Our aim is not to make money. It is to help people buy unsold units.”
However, he pointed out the initiative announced by Urban Wellbeing, Housing and Local Government Minister Noh Omar on Sept 8 should only be extended to first-time buyers and those planning to upgrade their homes to bigger units.
For instance, he said there were buyers who wanted to upgrade their property from a 700 sq feet home to bigger units or those wanting landed property below RM500,000.
He said market confidence in properties was down at the moment and measures were needed to help boost the industry.
He said the sales volume of residential properties were down from 52 per cent in the second half of 2015 to 39 per cent in 2016.
There were 7,172 units launched, but only 2,829 properties sold. It was also taking a longer time for developers to sell off their units.
“Let’s be realistic. The days of 2013 are gone. People are no longer queuing up or balloting to buy properties. Steps must be taken to allow more people to own homes and for developers to sell their units,” he said.
Due to the lack of demand, he said, property launches had also dropped significantly from 9,938 launches to 7,172 in 2016.
There was a drastic drop in sales for commercial units. In the first half of this year, developers saw a 30 per cent drop.
These figures did not, however, include commercial units above RM1.5 million in value, the demand of which developers said increased from 25 to 32 per cent.
“Basically there is demand for residential homes below RM200,000, which has gone up from 6 per cent to 14 per cent and commercial properties above RM1.5 million.”
Earlier Noh Omar said his ministry had proposed for housing developers to apply for moneylending licences so that they could offer loans to help house buyers overcome down payment issues.