PETALING JAYA: The government’s move to enhance first-time home buyers’ affordability is good, but it must be managed well to prevent buyers from borrowing beyond their means, the Federation of Malaysian Consumer Associations (Fomca) said today.
Prime Minister Najib Razak, in tabling Budget 2017 earlier today, announced several initiatives that will help first-time home buyers’ affordability, mainly building 30,000 houses priced between RM150,000 and RM300,000 and accessibility to higher loans from Perumahan Rakyat 1Malaysia (PR1MA), with an applicant being able to borrow up to RM295,000.
Fomca CEO Paul Selvaraj lauded the move, but maintained that financial education is important for first-time home buyers in order to prevent “over-borrowing”.
“Enabling them to get loans is good, but financial education is also important. It could put a financial burden on them as they could be borrowing beyond their capacity.
“It has to be managed. Housing loans are the biggest loans. We want a generation of house owners but, at the same time, there has to be a balance,” Paul told FMT.
He said financial education must be widely available to consumers, especially the young workers and young families.
“Not a lot of people have access to financial education. It must be made more accessible. We need emphasis on this.”
He added that the private housing sector should also be regulated, as what is being offered in the market is no less than RM500,000, which is unaffordable.
Overall, he said, the move by the government is a good step forward towards affordable housing but we must be cautious.