House buyers facing end-financing issues

PETALING JAYA: Financing issues is a major obstacle for property developers today with 53% of respondents in the Property Industry Survey 1H 2014 reporting that their buyers face issues with end-financing, said the Real Estate and Housing Developers' Association Malaysia (Rehda).
Rehda president Datuk Seri Fateh Iskandar Mohamed Mansor said the main issues with obtaining end-financing are ineligibility of buyers' income, lower margin of financing and banks requesting more documents.
"Banks now look at net income (when approving loans). Rehda wants banks to review this issue and consider more flexibility especially when dealing with first time home buyers," he told reporters at a briefing on the survey yesterday.
The survey showed that the RM250,001 to RM500,000 price range appears to be the most vulnerable to the end-financing challenge.
In terms of rejection by banks for end-financing, 30% of those rejected are within the RM250,001 to RM500,000 price range while 24% are within the RM500,001 to RM700,000 price range.
"We hope the banks will look at it. Each purchaser is unique. Don't only look at net income, look at other sources of income and if they are young, why don't you extend the (loan) tenure? There are a few ways to do it.
"You should make it as easy as possible for somebody who wants to buy a house, especially if it is owner-occupied. For first time buyers and owner-occupiers, you should make it as easy as possible rather than putting too many barriers. It (property) is the biggest wealth creation in one's lifetime," said Fateh.
He said Rehda hopes the government will re-introduce the Developer Interest Bearing Scheme in Budget 2015, at least for first time buyers and perhaps for properties priced below RM400,000 or RM500,000.
In the first six months of the year, only 39% of respondents had project launches with a total of 10,189 units launched. Last year, 10,985 units were launched in the first half (1H) and 9,364 units launched in the second half (2H).
Of the 10,189 units launched, only 49% or 4,989 units were sold compared with 53% sales in 2H 2013 out of 9,364 units launched.
In 1H 2014, majority (41%) of residential launches were priced between RM200,001 and RM500,000, which is a similar trend to 2H 2013 where 43% of launches were within the price range.
Of the 10,189 units launched in 1H 2014, 9,362 units were residential while the remaining 827 units were commercial.
In the commercial property segment, launches for shop office units rose 96% to 827 units in 1H 2014 from 423 units in 2H 2013. SOFO/SOVO units, which were popular two years ago, saw zero launches in 1H 2014 compared with 319 units in 2H 2013.