PETALING JAYA: A real estate analyst has questioned the government’s goal of building one million homes in 10 years, saying it is not the only solution to the housing predicament of the B40 and M40 groups.
“They (the government) only address the supply side of the shortage without studying the demand issues,” Malaysian Institute of Professional Real Estate Agents and Consultants deputy president See Kok Loong told FMT.
See said B40 and M40 groups were unable to own homes due to low real residual income.
He cited a study by Khazanah Research Institute which showed that real residual income for those earning a household income of RM2,000 and below per month was only RM76.
“How can you pay instalments with RM76 per month? No bank would want to give you a loan,” he said.
See proposed that EPF members be allowed to draw from their monthly contributions to pay for monthly instalments.
This would allow them to own property and have a higher real residual income without having to pay monthly rental, he said.
However, he cautioned that the proposed scheme would only work for younger members who have a longer time to service the loan before retirement.
“The B40 median household income is RM3,000 per month, so their monthly contribution to EPF is RM720. With the RM720 at an interest rate of 4.4% and a tenure of 25 years, the member is eligible for an RM135,000 loan.
“For the M40, the median income is RM6,275 per month. Their contribution is RM1,443 per month and with an interest rate of 4.4% and tenure of 25 years, they will be eligible for a loan of RM270,000,” he said.
In the long run, though, See recommended higher wage growth and productivity to raise the bar for the B40 and M40 groups to be eligible for bigger loans.
“The only way to do this would be to re-educate society and enhance their technical skills,” he said.