THE MALAYSIAN RESERVE. 17TH DECEMBER: The Real Estate and Housing Developers’ Association Malaysia (Rehda) and its research arm, Rehda Institute, has urged banks and financial institutions to expand their financing to improve home ownership for Malaysians during and post-pandemic.
Rehda president Datuk Soam Heng Choon (picture) said loan approval issues remained as one of the top home ownership challenges in the country and an immediate solution is urgently needed.
He stressed that financial institutions are still very risk-averse and too stringent in their assessment criteria to the detriment of prospective home buyers looking for a home.
“The government has provided various assistance under Budget 2022 and the 12th Malaysia Plan (12MP), but we feel this issue requires a comprehensive and holistic approach.
“Rehda has also met with the Ministry of Finance and Bank Negara Malaysia to discuss the issue of loan approval among homebuyers.
“We urge financial institutions to expand step-up financing and other alternative financing outlined by the government under the budget and the 12MP,” he said in a joint press conference in conjunction with the preliminary findings by Rehda Institute on Marketing and Sales Research Report for the property industry yesterday.
Soam added that the people looking to buy their first home or home upgraders that are employed in certain sectors and industries that are still heavily affected by the pandemic are not able to fulfil their dream to own a house due to inability to get a loan.
“Hence, those whose income was still affected due to the pandemic such as the underemployed and unemployed, as well as those whose income have reduced and those working in the gig economy due lack of proper documentation, find it challenging to obtain a loan.
“The above could be due to the financial institution’s risk committee imposing more stringent valuation on new property launched and also the secondary sub-sale market,” he said.
According to Soam, Rehda has proposed various initiatives to help increase home ownership, including continuing the implementation of the Home Ownership Campaign (HOC) and expanding the Rent-To-Own (RTO) initiative.
He noted that the RTO initiative must be accelerated so that people can become homeowners and the HOC needs to be extended to allow prospective home buyers “that have missed the boat” to purchase a home when their jobs and income improve over time.
He added that the association remains hopeful that the government would extend the HOC to support sales and marketing activities in the property market.
Meanwhile, Rehda Malaysia deputy president Datuk NK Tong expressed that the recent lockdowns and movement restrictions have impacted home buyers’ sentiment, with most of them feeling “less optimistic with a wait-and-see approach”.
He noted that most home buyers are waiting for more certainty, in terms of Malaysia’s path to economic recovery.
“We have yet to see whether the economic growth will continue in 2022 and whether it will be back to pre-pandemic economic growth as per 2019.
“However, we have trust in the government that they will do what is necessary to improve the broader economy, reducing underemployment, reducing unemployment and over such a period, more home buyers will have better ability to commit home ownership,” he added.
On another development, Tong said Rehda and Rehda Institute will look into developing a suitable digital marketing transformation initiative through a certification programme in 2022 with relevant partners to upskill and improve the digital marketing capability of property developers.
He said according to a preliminary finding from Rehda Institute’s Industrial Marketing and Sales Survey, November 2021, about 49% of the respondents expressed that the impact of digital marketing spending and digitalisation were found to be impactful.
Tong also highlighted that the findings revealed that there is slow and lack of digital technology adoption from property developers in Malaysia, particularly the medium sized to smaller developers.
“During the lockdown period and Covid-19, the developers were unable to embrace digitalisation especially relating to marketing and sales activities, particularly medium sized to smaller property developers outside Klang Valley.
“This also has an impact on home ownership in those geographical areas,” he said.
As such, Tong hoped that more incentives will be made available by the government and relevant agencies for the digitisation initiatives of companies, including small and medium enterprises which also consist of small and medium sized developers.