EPF proposal may affect housing industry: Fah Kui

16/12/2003 The Sun

THE Employees Provident Fund's proposal to allow contributors to make withdrawals to buy a second house does not go down well with the Housing and Local Government Ministry.

According to a report in Nanyang Siang Pau yesterday, the minister, Datuk Peter Chin Fah Kui, said the use of EPF savings to buy a second house is an opportunistic move, and will eventually affect the housing industry.

"It only gives contributors an opportunity to buy houses for investment," he said.

"Apart from renting out the houses and investment, what else will prompt them to withdraw their savings to buy a second house?"

He said the proposal, if allowed, will hinder the government's aim to ensure home ownership for all Malaysians.

He said that allowing contributors to take out their savings to pay for a second house will only enable those who are better off to snap up houses and resell them to those who cannot afford new ones.

Chin said this after opening a karaoke competition in Miri on Saturday.

At present, EPF allows savers to withdraw part of their money to buy the first house and make periodic withdrawals to reduce the housing loans.

Last week, EPF chief executive officer Datuk Azlan Zainol said the fund may disallow contributors turning 50 from making their pre-retirement withdrawal of one-third of their savings but allow contributors to make withdrawals to buy a second house.

Chin said EPF should conduct a thorough study of the proposals, including their impact on the housing industry.

"Allowing contributors to make withdrawals to buy a second house will create a greater demand for houses, causing the prices to go up and beyond the reach of those who should be owning houses. This is unfair."

However, the ministry believes that withdrawals by contributors who want to sell their present houses to buy bigger ones should be considered, he said.