Rent out unsold housing units to youths? No can do, say developers

Bernama pic.

PETALING JAYA: A developers group has panned the idea of renting out unsold housing units to youths, saying it would take too long for developers to recover their capital.

Jerry Chan, the immediate past chairman of the Penang Real Estate and Housing Developers Association, said the suggestion would tie up too much capital for many developers, which was needed for other projects.

“Most of us do not have the financial muscle to keep the unsold units and rent them out to people,” he told FMT.

“There are big developers with big projects doing the rent-to-own scheme for certain premium units,” he said. “This doesn’t happen across the board in all their projects.

“But generally, developers want to achieve full sales and move on to another project.”

He was responding to Asian Strategy and Leadership Institute’s Lau Zheng Zhou, who proposed that developers rent out unsold housing units to youngsters who could not afford to own homes.

Lau said this would achieve two goals at once, by providing homes for youths who are unable to afford down payments, and reducing the need for affordable housing projects.

However, Chan instead recommended that banks provide financing schemes with initial lower instalments equivalent to the market rent. This could then be shifted to full instalments on the loan repayments.

“It is hard for developers to recover their capital through renting,” he said.

“Developers are in the business of building and developing, not lending or renting homes.”