Tough side of house-buying

PETALING JAYA: Since home ownership is essential for financial security, rent-to-own schemes should be given greater emphasis.

National House Buyers Association (HBA) secretary-general Datuk Chang Kim Loong told theSun that such schemes would help low-income earners to achieve their dream of owning their own property.

“HBA has in the past pushed for both the government and private developers to implement this social housing scheme to help the B40 and M40 to purchase their first house.”

He also called for more awareness on the financial implications of buying a house.

While home ownership by low-income households is a priority, issues such as financial management should not be left out as owning a home is among the biggest financial commitments compared with renting.

Chang said there is a need for a home ownership education programme during this period of uncertainty to avoid bad deals among first-time buyers.

“One lesson the pandemic has taught us is that prudent planning is crucial to prevent problems like losing their homes and not being able to finance their purchase,” he added.

“Similar to the counselling and debt management programmes conducted by the Credit Counselling and Debt Management Agency, we proposed a home ownership education programme in 2015 to prepare low and medium income earners for the responsibilities of owning a home.”

He said the programme could be in the form of e-workshops covering topics like evaluating household needs, understanding housing types, the loan process, financial preparation and budgeting monthly expenses, which ideally should be completed before a buyer signs the purchase agreement.

Institute for Democracy and Economic Affairs senior economist Adli Amirullah said renting is a good option for those who are ill-prepared to take on the financial commitment of buying a house.

He agreed that rent-to-own schemes for B40 homeowners would be a great help to relieve their burden, but he pointed out that not everyone could afford to buy their own property.

Data provided by the Department of Statistics in March last year showed that 71.4% of those who were self-employed had savings that could last for a month, while 82.7% of those in the private sector had sufficient financial savings for a couple of months.

“The reality today is affordable homes are affordable on paper but most buyers are struggling to get financial assistance as some even face difficulties providing a deposit or a booking fee,“ Adli said.

“If you can afford to buy a house, it would not be a problem. But if you are facing a financial crisis or do not have savings, then think again.”

Source: TheSunDaily