Emphasis on Rent-To-Own homes: CM

Kota Kinabalu: Chief Minister Datuk Seri Mohd Shafie Apdal (pic) said the Rent-To-Own (RTO) concept need to be put in a wider application in order to encourage home ownership.

RTO means a person who cannot make the down payment for a property or obtain a bank loan, may rent the property for a period of five (5) years with an option to buy.

“On the subject of home ownership, one way to encourage it is putting the rent-to-own concept in wider application.

“RTO allows the purchaser to raise their down payment and improvement of their credit rating to get approval for the housing loan.

“I was told that Shareda is in the process of establishing a SPV (special purpose vehicle) for the promotion of the RTO scheme in Sabah,” he said when officiating the National Home Ownership Campaign (HOC) 2019 – Sabah Sector, jointly organised by Shareda (Sabah Housing and Real Estate DevelopersDevelopers Association) and Property Hunter, at the Foo Chow Hall, Friday. His speech was read by Deputy Chief Minister cum Trade and Industry Minister, Datuk Seri Wilfred Madius Tangau.

The nationwide Home Ownership Campaign 2019 is initiated by the Federal Finance Ministry to encourage home purchases by giving discounts and exemption from stamp duties and address the growing property overhang in the country which surfaced in 2017 and is becoming a concern.

But the Chief Minister was relieved to learn that unsold residential properties in Sabah make up only about 3.24pc of the national total of 30,115 at the third quarter of 2018, according to the report by National Property Information Centre (NAPIC).

“As the property sector is a major mover of our economy, a vibrant property market is a reflection of a robust economy. Therefore, having too many properties unsold means that huge capital is being tied up, and if left unchecked, it can reach a stage where it can have negative risk on the economy,” said Shafie.

Congratulating Shareda for taking up the responsibility to organise the three-day Sabah sector of the campaign, which feature at least 30 projects with properties for sale, he encouraged the people to take advantage of the campaign and to make their purchases.

Malaysia has been struggling with providing enough affordable housing in the country, he said, adding the Bank Negara research data show more than 83pc of the unsold residential units are those priced above RM250,000 with many costing up to RM500,000.

“But by Malaysian median, an affordable price range is RM300,000 per unit,” he said, while commending the association members’ pledge to build affordable houses in Sabah with prices below RM300,000.

“I understand that many members of Shareda have pledged to and are building affordable houses in Sabah with prices below RM300,000. I commend them for their efforts in matching their projects with affordability in the market, given that the government was always striving towards owner-occupied home ownership by keeping a tight lid on prices.

“In fact, Sabah is the only state that has this price control mechanism, and I want to assure Shareda that my administration is taking note of your appeal to remove it. We realise that red tape contributes to the developers’ holding costs and, therefore, house prices. We are looking into streamlining the approval process to make it more transparent and business friendly.”

Real estate developers, most of whom are members of Shareda, play no small role in the state’s economy, said Shafie, who is also State Finance Minister, while hoping that in their own way they will also play a role in drawing in investments and highlighting innovation.

He said house affordability is directly linked to household income, adding the current State Government is making serious efforts in strengthening and deepening the economy to generate higher income.

“For example, we are looking at attracting investments from China, and expanding industrialisation. An effort is underway to rally the public-listed companies based in Sabah to participate in development initiatives.

“There are about 30 such companies, and their combined market capitalisation in Bursa Malaysia is more than RM30 billion. We are planning dialogues with these business leaders to tap their business knowhow and financial resources to achieve quantum progress in our development,” he said.

Meanwhile, Tangau also took the opportunity to invite Shareda to join in the Sabah Trade Mission to China scheduled this month.

“My Ministry has been tasked to prepare the State trade mission to China, and perhaps also japan, which is expected this month and I would like to invite Shareda to come along,” he said.

Shareda President, Chew Sang Hai, and HOC Sabah Sector organising chairperson, Benny Ng, among others, were also present.

Source : DailyExpress