It was reported on Tuesday that Azmin had requested Bank Negara to review its housing loan policy so that more people can own houses.
However, according to PSM Central Committee member Dr Michael Jeyakumar, this would only result in people losing more money when they fail to pay for the housing loans they’ve obtained.
“If you relax the housing loan rules too much, then after a few years, when people fail to pay for these loans, not only will they lose their houses and all the money they’ve spent on the house so far, they will still be left owing even more money to the bank as the house is auctioned off at a lower price,” he told FMT.
He instead suggested that more affordable housing be made available.
“The problem is that the difference between the price of houses and income of the bottom 40 per cent is huge. Some 70 per cent of houses are above what they can afford.
“What the government can do is something they did back in the 1970s and the 1980s — build low-cost houses on government land and sell them at prices that people can afford.”
He added that another issue was that selling houses had become a lucrative business.
“When state governments are given government land, they go into a joint venture with private developers where the houses are sold at higher prices and the state government is then given a cut.
“These developers find that it is better to build high-end houses for the wealthy, who buy two or three of these houses and don’t even stay in them, but keep them as assets as the cost appreciates over time.”
Federation of Malaysian Consumers Association (Fomca) Secretary-General Paul Selvaraj said a more holistic approach was needed to help the less fortunate own houses.
Speaking to FMT, Selvaraj agreed with Jeyakumar that at present there was not enough affordable housing available.
He said the affordable homes were in the outskirts, which were too far for those who worked in the city centres of Kuala Lumpur and Selangor.
“It entails even more cost when people buy houses in the outskirts because then they have to pay for travelling to work and back home every day.
“So apart from having affordable housing projects like Perumahan Rakyat 1Malaysia (PR1MA), the government also has to ensure that there is good public transport to the outskirts for people who live there.”
He added that even the starting prices for most homes in Kuala Lumpur and Selangor city centres were too expensive for the layman to afford.
“The starting prices range from RM400,000 to RM500,000, which is much too expensive. The government needs to provide more affordable homes to the people working in these areas.”
Meanwhile, National House Buyers Association (HBA) Honorary Secretary-General Chang Kim Loong agreed that the current housing loan policies were strict, but that it was a good thing.
“People have to realise that it is not that banks don’t want to give loans. Banks are in the business of giving out loans, so why wouldn’t they want to? But they can’t give you the loan if they know you’re not eligible and the rule of thumb here is that you should be able to afford one-third of your salary every month to pay for that loan,” he told FMT.
He added that people often forget that paying for a house entails other costs apart from the loan, which they have to pay monthly.
“Often, people don’t take into account that buying a house includes paying for utilities, repairs and legal fees. If you’re buying a condominium or a serviced apartment, then it also includes maintenance fees.”
Chang also said people need to weigh the pros and cons of owning a property as opposed to renting.
“For example, if you buy a house in Selangor and you are suddenly transferred to Ipoh, then you’re stuck. Whereas if you rent a house, it is easier to uproot yourself.
“A 30-year loan is a big commitment as you’re bound by a multiple-year loan agreement and if you fail to pay, then foreclosure occurs.”