PETALING JAYA: The housing and local government ministry says many civil servants are unable to own homes due to banks’ strict conditions for loans, following a report that the majority of government workers below the age of 30 do not own a house.
“The price of houses is not the main reason why many people are still unable to get approval from banks for house loans,” deputy minister Raja Kamarul Bahrin told FMT.
“We have worked hard to reduce the price of houses but banks have their own criteria and this makes it hard for people to obtain loans.”
Even for affordable houses priced at RM80,000, he said, the rejection rate for loans is “very high”.
“Banks are not being flexible. That is why many people are still unable to buy houses.”
Cuepacs president Azih Muda said on Wednesday that 95% of civil servants below 30 and 75% of civil servants below 40 do not own houses.
He said this was because house prices are too high, given that most civil servants earn RM4,000 and below each month.
Raja Kamarul said the ministry had done all it could to tackle the issue, including initiating efforts to reduce house prices.
“It’s not right to say it is the ministry’s fault for not being able to tackle the issue,” he said.
“The problem now lies with the banks as they may have their own formula when it comes to approving loans.”
He said there are those who earn RM7,000 per month but who are unable to obtain loans as they have other commitments such as credit cards and car loans that are also taken into account by banks.
He said the ministry had also held consultations with banks, urging them to be more flexible when approving loans and to consider the applicant’s side income as well. However, not all banks are cooperating, he added.
He said the government would continue to study the matter in order to give assistance to homebuyers.