Ministry to meet HBA and Redha on developer loans proposal

Ministry to meet HBA and Redha on developer loans proposal

PETALING JAYA, 13 September: The Ministry of Urban Well-being, Housing and Local Government will hold a dialogue with the House Buyers Association (HBA) and the Real Estate Housing Developer’s Association (Rehda) next Tuesday, following the uproar sparked by the proposal to issue moneylending licences to developers to provide more financing options for house buyers.

Minister Tan Sri Noh Omar announced that the scheme was open for applications late last week, but backtracked at the weekend, saying it was just a proposal and that a comprehensive study would be done first.

HBA secretary-general Chang Kim Loong, in calling the proposal an ill-advised one, said the association had not been consulted prior to the announcement.

He opined that the best solution in the current climate is for developers to build and buyers to rent first with the option for the house buyers to buy at a later date.

“Buying and owning a house is a riskier proposition for households compared with renting. Buyers take on enormous debts, sign multi-year loan agreements and become responsible for homeowners’ cost of their homes while renting is a much easier undertaking.

“The government should in fact, encourage potential house buyers to rent if they do not even have the ‘up-front seed money’. Be mindful that foreclosures can devastate a family’s economic and social standing, leaving them poorer instead,” he said.

Chang said that ensuring households have sufficient personal financial management skills is more than a supplementary issue, and financiers, local authorities and communities benefit from home owners being better informed of their rights and responsibilities as house owners and borrowers.