Legislation To Address Current Issues On Housing Loan
15/09/2006 Bernama

KUALA LUMPUR, Sept 15 (Bernama) -- A legislation to address current issues concerning housing loan among housebuyers and property developers is expected to be implemented in the first half of next year.

Housing and Local Government Minister, Datuk Seri Ong Ka Ting said discussions were underway between players such as developers associations, the housebuyers association, the banking industry and other related parties to ascertain the best solution on property loan issues.

"It is a "chicken and egg" phenomenon. Bankers are unwilling to give out loans to developers unless a certain percentage of sales takes effect. However, some developers will have difficulty in financing the rest of the project," Ong said at a media briefing after officiating the Malaysia Property Exposition 2006 (MAPEX 2006).

President of Real Estate and Housing Developers' Association Malaysia (REHDA), Ng Seing Liong said the current conventional system of approving loans may not help the property market.

Ng suggested that banks approve loans based on the potential of the gross development value or sales value after the property projects are completed.

Ong said housebuyers must also be committed and ensure that they have the means and financial resources to settle the balance of loan upon signing the sale and purchase agreement and payment of 10 percent of the price of the property.

MAPEX 2006 is showcasing more than 11,500 units of properties with a total retail value of about RM4.6 billion.-- BERNAMA