Developers' home financing scheme still on the table: Noh

KUALA LUMPUR: The proposal on property developers offering financing to house buyers is still on the table, according to Urban Wellbeing, Housing and Local Government Minister Tan Sri Noh Omar.

Despite receiving flak over the effectiveness of the proposed scheme to help increase home ownership, Noh said its ministry is studying the proposal with the counsel of the Real Estate and Housing Developers’ Association Malaysia, the National House Buyers Association of Malaysia and other non-governmental organisations.

“We want to make sure that if we continue with this policy, it will be a win-win situation between purchasers and developers,” he told reporters after witnessing the signing of an agreement between Titijaya Land Bhd and China's CREC Development (M) Sdn Bhd on a project at Embassy Row in Kuala Lumpur.

Noh said the developers must follow and agree to the terms and conditions set under the new scheme. A total of 42 developers have moneylending licences currently.

In September, he said property developers could apply for a licence under the Moneylenders Act 1951 and the Pawnbrokers Act 1972 in a bid to provide more financing options for home buyers.

The interest rate would be capped at 12% a year for borrowers with collateral and 18% a year for those without collateral while the loan tenure would be between 10 and 20 years. Eligible property developers may provide up to 100% financing to all home buyers. 

Since then, however, there have been calls to review the policy to allow developers to lend money to home buyers, drawing attention to the high interest rates and the lack of fregulatory supervision in the scheme.