Rent-and-Save needs fine-tuning: HBA

PETALING JAYA: The Rent-and-Save scheme announced by the prime minister on Monday does not address the affordability issue but merely prolongs the problem by another five years, said National House Buyers Association (HBA) secretary-general Chang Kim Loong.
“Although the scheme appears to reduce the burden of aspiring house buyers by offering a very low effective rental rate of only RM500 (RM800 less RM300 to be returned back after five years), it still does not solve the problem that house prices are just beyond the reach of the average Malaysian,” he told SunBiz yesterday.
Although HBA is glad that the government has acknowledged the average Malaysian’s struggle to buy their first home, it suggested that the government fine-tune the scheme into a Rent-to-Buy scheme whereby tenants are given the option to buy the units they are renting.
“If the current tenant declines the offer, he can be given the RM18,000 in cash and find another property of his choice. However, if he accepts the offer, the RM18,000 will be used as downpayment to purchase the said property and the current tenant can continue to stay but may need to pay slightly higher rentals, with the entire rental amount being used to secure the property, thus there will be no further so-called cash back amounts,” said Chang.
As announced by the prime minister, the Rent-and-Save scheme will see certain government properties rented for RM800 a month for five years, with RM500 being the rent and RM300 being “forced savings”.
At the end of five years, tenants will receive RM18,000 in savings to help them purchase their new homes. However, the tenants will have to vacate the units as these homes are not for sale. A new generation of tenants will move in under the scheme.
“Armed with only RM18,000 in cash for a traditional 10% downpayment, this means that the maximum price that a person can afford is only RM180,000.
“Even based on current property prices, there are not many choices for properties in this price range. If we factor in just the normal inflation rate after five years, property prices will be even more expensive, leaving even less choices for a property only worth RM180,000,” said Chang.
The scheme will be implemented at the Pangsapuri Bandaraya@Sg. Udang Segambut project, which will have three blocks offering 1,251 units. Each unit will measure 807 sq ft with three bedrooms and two bathrooms.
The project will also have facilities such as a swimming pool, five-storey car park, multipurpose hall and shop lots. It is scheduled for completion by December 2019 and will mainly be funded and developed by Kuala Lumpur City Hall and is limited to those with household income of less than RM10,000 per month.