Crowdfunding for housing worth the risk, says Guan Eng

The government hopes the peer-to-peer funding scheme will help first-time buyers to own a home.

HULU LANGAT: The government’s proposed peer-to-peer funding scheme for housing will not be approved until all factors are considered, Finance Minister Lim Guan Eng said today.

Lim admitted the scheme is not easy to comprehend and therefore, it is natural for people to be sceptical about it.

“I believe that with safeguards in place for the scheme, we can blaze a path and enable home ownership on a larger scale.

“We know, our heads are on the chopping block. But it is a risk worth taking to deliver on our promise to build one million affordable homes.

“It is all about risks. Bank Negara Malaysia is also measuring the risks. We will not be approving this until all factors are considered,” he said after the launch of the EdgeProp’s FundMyHome funding scheme by Prime Minister Dr Mahathir Mohamad in Semenyih here today.

Also present was The Edge Media Group chairman Tong Kooi Ong and Eco World Development Group Berhad founder Rashid Abdul Manaf.

Lim, in the 2019 Budget tabled on Friday, had said the government would be approving private sector-driven “property crowdfunding” platforms to serve as an alternative source of financing for first-time house buyers.

Finance Minister Lim Guan Eng.

The Securities Commission will regulate these platforms under the peer-to-peer (P2P) financing framework.

Under the P2P financing framework, the buyer will be able to acquire a selected property by paying 20% of the price. They will be able to choose from a wide array of high-rise and landed homes of different prices and locations showcased on the website.

The remaining 80% will be borne by potential investors who fund the purchase in exchange for its potential appreciation in value over a particular period of time.

Responding to concerns raised by the House Buyers Association (HBA) on the viability of the scheme, Lim said they would hold a dialogue with the association on the scheme’s intricacies.

“If the HBA is not concerned, and just take it based on the two paragraphs I mentioned in the budget, then something is wrong. Definitely, they will be concerned but we want to explain the mechanics to them.

“This is new. It is natural for people to be sceptical but explanations will be there,” he said.

The HBA had criticised the move, saying that it might open up floodgates for scams, unsold properties, and there were uncertainties as to how the mechanism would work.

Lim said the Securities Commission (SC), which is the regulatory body, would need to go through the mechanics of the FundMyHome scheme. He expressed hope for approval of the scheme in the first quarter of next year.