|Move to stretch housing loans over two
The Star 26/1/2005 BY NICK LEONG
KUALA LUMPUR: Housing mortgage payments will be
stretched over two generations to lessen the burden on borrowers under a
move being studied by the Government.
Housing and Local Government Minister Datuk Seri Ong Ka Ting said the idea
was conceived to make it easier for poor and hardcore poor families to buy
low-cost houses or apartments.
“For poor families – those earning less than RM600 a month – how can they
afford to buy a house? Banks will not lend them any money and they cannot
even afford the down payment.
“We are thinking of how to overcome this and one idea is to allow a child,
when he or she grows up, to continue paying the mortgage,” he said after a
meet-the-people session at Kampung Chubadak, here, yesterday.
Ong said the amount poor families came up with for down payments and
monthly repayments would be lowered if the mortgage period was lengthened.
“We hope this proposal will be considered for the Ninth Malaysia Plan to
help the poor buy their own houses,” he said.
Ong said the ministry also planned to expand the scope of urban poverty to
include townships away from city centres.
He said urban poverty did not just refer to the poor living in big cities
like the federal capital or Johor Baru.
“There are many people living under the local councils outside the cities
who are poor and need attention,” he said.
He said the ministry had identified five key areas – a steady income, good
health, social facilities, education and housing – to combat poverty.
Housing developers, real estate agents and house buyers welcomed the
proposal to stretch mortgage payments.
Real Estate and Housing Developers Association president Datuk Jeffrey Ng
said it was an effective way to help the poor get out of the poverty
He said unlike other forms of investment, property was inflation-hedged.
“Over time, the value of the property goes up even after considering
inflation,” he said.
Ng said the proposal, if implemented, would create a sustainable demand
for property and help the country meet its aim of providing a home for
He said there should be a cap on the type of property the poor and
hardcore poor were allowed to buy under the proposal.
“The facility should be given to them based on what they can afford rather
than what they want,” he said.
National House Buyers Association secretary-general Chang Kim Loong said
the proposal would benefit all parties – poor families, the Government,
banks and housing developers.
“I don’t think the child will mind inheriting the mortgage repayment from
the father because he will eventually own a house that has been partly
paid for,” he said.
Chang said the Government should also focus on educating first-time house
buyers on their responsibilities.
He said some house buyers thought all they needed to buy property was to
come up with a 10% down payment.
“Many are ignorant about the responsibilities of a property owner such as
paying maintenance fees or quit rent,” he said.
A real estate agent who did not want to be identified said some banks were
already allowing housing loans to be shared between a parent and a child.