Mahathir wants proof crowdfunding for housing will work

Prime Minister Dr Mahathir Mohamad says the government wants to get the private sector to build one million low-cost and affordable homes.

HULU LANGAT: Prime Minister Dr Mahathir Mohamad says he likes the idea of a crowdfunding scheme for housing but will need proof that it will work.

“Thousands want to buy a house, but thousands of houses cannot be bought. They are empty because house buyers cannot afford, and banks do not easily lend to people who cannot pay back.

“Among the ideas I found worthy to listen to is how people who are unable to buy houses can now buy, with investors paying 80% and the buyers forking out 20%.

“Suddenly houses become affordable to those who cannot buy (not qualified for) low-cost or affordable housing,” he said at the launch of the EdgeProp’s FundMyHome initiative in Semenyih here today.

Also present were Finance Minister Lim Guan Eng, The Edge Media Group chairman Tong Kooi Ong and Eco World Development Group Berhad founder Rashid Abdul Manaf.

However, Mahathir said the crowdfunding initiative was a “fantastic scheme” that he found hard to believe. He wanted proof that the houses could be sold and there would be people investing.

“Until he (Tong) shows this, I will not believe. I want to see the house, the owner, and the investor,” he said.

“The proof of the pudding is in the eating.”

Mahathir expressed hope that such crowdfunding initiatives would enable more people to own houses. He also believed that such a scheme would help the PH government achieve its aim of building a million affordable homes in 10 years.

“We are willing to listen to other schemes by other developers,” he added.

The FundMyHome scheme brings together first-time homebuyers and institutions in a mutually supportive relationship, where buyers pay 20% of the property price to own a home, choosing from a wide array of high-rise and landed homes of different prices and locations showcased on the website.

The balance 80% of the property cost is contributed by participating institutions, who share the returns from changes in the future value of the home.

Mahathir told reporters later that the Employees Provident Fund (EPF) could invest in privately-driven property crowdfunding platforms, if they feel they can get a good return.

Mahathir pointed out that investment in property normally yielded good returns, stating that the value of property goes up even if the house is older.

“Like I told the story of my driver who bought his house for RM35,000. Now people are asking at a price of RM130,000.

“The house value always goes up. The land value for instance. In the past, you could buy land at RM100 per square foot. But now, the land value is at RM7,000 per square foot.

“The land value goes up due to development around it. Put in the LRT and the MRT. Immediately the value goes up. If you build roads and infrastructure, that adds to the value of the land,” he said.

On the Pakatan Harapan (PH) government’s promise to build one million affordable homes in 10 years, Mahathir said this would not be done by the government alone.

“It does not mean the government will build one million houses in 10 years. It may be less or more, but it is our promise. The government will not be building all the houses, but some will be built by the government.

“The private sector is invited to supply these houses. What is important is that they can be afforded by the low-income group.

“We want to get the private sector to build one million low-cost and affordable housing,” he said.

Earlier in his speech, Mahathir also said that while PH could promise anything during the general election, fulfilling those pledges is not as easy.

He said PH is concerned it cannot fulfil the promise of building one million affordable homes.