PETALING JAYA: Second Finance Minister Johari Abdul Ghani has urged Malaysians to rent homes first instead of committing to buying a house when they are not financially stable to do so.
In a statement today he said there should be a change of mindset towards renting as an option until one is able to commit to financing schemes to buy a house.
He stressed that there should not be any stigma on renting long-term family accommodation as is commonly done in developed countries like in Europe.
Johari said a short video broadcast on KiniTV on March 30 on part of the ministry’s public dialogue on the economic aspect of the Transformasi Nasional 2050 (TN50) plan had wrongly portrayed him as urging Malaysians not to purchase houses for their accommodation but continue to rent instead.
He said he was merely throwing up the idea of renting a home until such time that people are in a position in their life or career to commit to the financial responsibility of purchasing a residential property, be it a house or apartment.
He said it is the culture among Malaysians, upon entering the workforce, to commit themselves to huge financial burdens, especially in buying a car and a home.
“While the financial commitment for a car may last up to nine years, the financial commitment for a home can last up to 30 years,” he said.
“Thus, Malaysians tie themselves up to such a financial burden at such an early stage in their life when they should actually and ideally concentrate in developing their careers instead.”
He said by being free of such financial commitments, they could enhance their job mobility by exploring opportunities at other work places, seeking different careers or developing entrepreneurship by starting their own business or enterprises, he said.
Johari noted that in more advanced economies such as countries in Europe, the percentage of house ownership is much lower than in Malaysia as the cultural mindset is different.
“There is no stigma to renting family accommodation throughout their lives instead of being burdened with financial-repayment responsibilities of home ownership,” he said.
He said in Germany only 41% of the population are home-owners and in Switzerland it is even lower at 38%.
Johari pointed out that in Greece, which is facing economic hardship, the home ownership level is much higher at 73%, and burdensome financial commitments are being cited as a contributing factor to the country’s economic woes.
Johari said the concept of long-term rental of accommodation is only one of many ideas that Malaysians should consider.
“At the end of the day, Malaysians themselves should evaluate their own living situation to see what will work best to be part of the progress of the nation,” he said.
“Those who can afford to buy their own home at an early age, by all means, no one can stop you from doing that.”
He added that the government will continue to encourage developers to create more affordable houses and embark on a rent-to-own concept.