'My First Home Loan scheme and PR1MA not working' - DAP

The problem average Malaysians face in owning homes cannot be solved with the Government’s ‘My First Home Loan’(SRP) scheme and Perumahan Rakyat 1Malaysia (PR1MA) affordable houses, claimed DAP today.

Calling these initiatives ‘way off the mark’, Kluang MP Liew Chin Tong suggested instead that the government to consider a "semi-rental or shared equity" model.

“What the government has done is not working and won’t work because firstly, people still have low income, and housing prices remain to be so high,” said Liew.

Liew explained that his proposal for a semi-rental model involves having families renting a house for a number of years first and the Government later allows for the house to be bought.

“The rent that has already been paid will then be converted to the installment for buying the house. This is already being done for People’s Housing Programme(PPR) low cost houses,” he said.

Asked if he was suggesting that the Government focus more on middle income group at the expense of lower income groups, Liew said that the problems with PPR revolves around maintanence and quality.

"The problem of numbers doesn't arise with PPR low cost housing, but the number of young families being able to afford buying a house is a real issue," he said.

Liew said that his second suggestion of having shared equity model, on the other hand, involves the Government owning a percentage of the houses.

He said that the My First Home Loan scheme and PR1MA does not work for 80% of Malaysians who earn less than RM3,000 a month.

“The impracticability of the My First Home Loan Scheme (SRP) demonstrates how out of touch the Barisan Nasional government is with the economic realities faced by average Malaysians living in the no-buy zone,” he said.

Liew highlighted the fact that since the loan scheme was first announced in the 2011 budget, only 485 loans have been approved. Out of 1,410 applications.

“This hardly makes a dent in the statistics of Malaysians who cannot afford to purchase property with the skyrocketing prices particularly in urban areas,” he said.

My First Home Loan offers 100% loans to those earning below RM5,000 per month for houses below RM400,000.

“On paper, this sounds like a good solution to ease the house-hunting dilemma of young working adults. In fact, calculations will show that the figures are too good to be true for young, middle income, families,” he said.

In an example, Liew said that a 30-year-loan for RM400,000 with a 4.4% interest rate,would require a monthly repayment sum of RM2,003, and this was a an “unrealistic” amount for a family earning less than RM3,000.