Property Information

House buyers’ trap

  WHY does this keep happening to house buyers in Malaysia? This incident happened two years ago in Taiping where a laid-back community of mainly retirees found the roof over their heads nearly, and in some cases, actually, blown away. The purchasers had paid the developer and had moved into their houses and lived there for 10 years. Problem was that the purchasers paid the developers in cash remittance without taking out end-financing loans. Unknown to the purchasers, the developer did not pay the developer’s bank to settle the developer’s loan vide bridging loans. The developer’s charge remained and grew into bigger indebtedness to the bank. Apparently, the developer’s bank had not been collecting payment of the loan from the developer, even as the developer was collecting the insta...Read More

House buyers still being hoodwinked?

FOR many years, the National House Buyers Association (HBA) has been sounding alarm bells that prices of houses are getting more and more unaffordable for the average rakyat, especially the lower and middle income segment. Based on current starting salaries of about RM3,000 per month and with prices of new launches of apartments in the Klang Valley being priced in excess of RM500,000, it is almost impossible for our younger generation and single parents to own their own homes. Unless strong measures are taken by the Government to address the issue of steep rise in house prices, Malaysia risk facing a “homeless generation” that can cause various social issues with far reaching complication. HBA had previously expressed its gratitude and thanks when the Prime Minister introduced stronger mea...Read More

Helping the poor own houses

BUYING a home is typically the largest and most complicated financial commitment most people will ever make”. This is the phrase used whenever there is talk of homeownership and it applies to low-income households, too. First-time buyers face many barriers, one of them being the burden of monthly payments, having enough savings to sustain the responsibilities of owning a house, and income stability to qualify for housing loans. Even if they do qualify, potential buyers may be hampered by a lack of affordable homes in a preferred location or even information on how to buy a home. While the basics of acquiring a home is accessible to the educated and higher-income group, the low-income households do not have access to such information and perhaps have no idea about how to become homeowners. ...Read More

HBA wants the BTS model for affordable houses

SHOULDN’T buyers of affordable houses be given more protection? Do they have lawyers to advise them? And act for them in court against dishonest developers? Are they expected to spend a lot of money pursuing their interests and entitlement? Even the reasonably well-off suffer because of the lopsided sale & purchase agreement (SPA) provided by the Housing Ministry and exploited by developers. HBA’s long campaign against the sell-then-build (STB) system should be vindicated in the case of buyers of affordable houses. The buyers of affordable houses are people of modest means, and deserve to be protected. BTS 10:90 vs STB The current STB system has caused abandonment and, worst, foreclosure of the purchaser’s property by the developer’s banks. The STB is the developer’s dream as it allows...Read More

HBA applauds implementation of BTS policy by KPKT

KUALA LUMPUR: The National House Buyers Association (HBA) hails the announcement made by the Minister of Housing and Local Government Zuraida Kamaruddin to ensure housing projects adhere to the build then sell (BTS) concept. According to the statement, the HBA supports the overwhelming benefits of the BTS 10:90 that the present housing minister is referring to. The system that was referred to is not an absolute BTS concept but a hybrid that the HBA termed as build then sell 10:90 (BTS 10:90). Briefly, in this system, buyers pay 10% down payment upon signing the Sales and Purchase Agreement (SPA) and the remaining 90% will be payable upon completion with the issuance of Certificate of Completion and Compliance (CCC), with utilities connected and houses ready for immediate occupation. This i...Read More

Fear of homeless generation

THE National House Buyers Association (HBA) has been warning the Government for many years that prices of property have risen beyond the reach of the majority of Malaysians and that unless it takes serious measures to tackle this issue, a “homeless generation” will emerge. Putrajaya’s housing programmes, including giving subsidies to Malaysians to own a home, are not holistic solutions to this country’s housing woes. The Government must move away from the mentality of “giving fish” to teaching people “how to fish” – in other words, empowering the public. The Government has been providing subsidies and social housing to the poor for generations. But has that improved their lot? These subsidies/incentives come from taxpayers’ pocket. Invariably, a taxpayer who cannot afford to buy a house wi...Read More

First-time house buyers to gain

HBA is happy that more affordable homes are to be built under Budget 2015 and DIBS ban stays. THE National House Buyers Association (HBA) wishes to thank the Prime Minister for the measures announced in Budget 2015 to build more affordable homes for the rakyat. HBA is grateful that the Prime Minister rejected calls from the Real Estate and Housing Developers’ Association Malaysia and other groups with vested interest to reintroduce Developer Interest Bearing Scheme (DIBS) for first-time house buyers. DIBS The HBA is glad the Government has continued to heed our call to ban DIBS or any permutation that entails interest capitalisation. Developers, being entrepreneurs, have to be responsible and bear the risks that come with their investment. They should not be allowed to enjoy profits at the...Read More

Finally an honest admission – House prices in Malaysia are unaffordable

THE National House Buyers Association (HBA) is glad that the research report by Khazanah Research Institute (Khazanah Research) released on Aug 24, 2015 titled “Making Housing Affordable” shows that average house prices in Malaysia are more than four times the median income, which makes such properties to be considered as “seriously unaffordable”. HBA has been raising alarm bells for many years that prices of property in Malaysia have risen beyond the reach of the majority of the rakyat, both in the lower and middle income segments and unless serious measures are taken by the Government, an entire “Homeless Generation” comprising mainly the lower and middle income and the younger generation will not be able to afford to buy their own homes and this can bring about social problems for the c...Read More

Downside of interest bearing scheme

False market: The DIBS had created a false demand which in turn pushed up property prices making houses ‘seriously unaffordable’ to the average person. EVERY now and then some quarters will accept developers’ mantra to re-introduce the Developers Interest Bearing Scheme (DIBS). It should be noted that Bank Negara had prohibited and outlawed “any form of interest capitalisation scheme”. The economic downturn is seen as a fresh opportunity for DIBS to be reconsidered. This time around, it’s only for “first time house buyers”. Creating property bubble DIBS or any other permutation similarly “schemed” cannot be allowed to continue for the betterment of the housing industry because it risks creating a property bubble as prices have been artificially increased and they will create a snowball eff...Read More

Do necessary checks before buying

THE NATIONAL House Buyers Association (HBA) refers to the statements from the Real Estate and Housing Developers’ Association Malaysia (Rehda) that the recent proposal from the Minister of Urban Wellbeing, Housing and Local Government, Tan Sri Noh Omar for eligible property developers to be given a moneylender license is only for the property developers to lend money to buyers as a “bridge” for downpayment on their home purchases and not as a full loan as speculated claiming that most bank loans today will only give margin of financing of 80% compared with 90% previously. HBA reaffirms our earlier view that despite the clarification from Rehda that developers lend money to buyers as a “bridge” for down payment for houses priced at RM500,000 and below, this proposal is still detrimental to ...Read More

Damages for late delivery

Addressing and defining vacant possession. “MY new house is ready and I can now collect my keys,” or so the house-buyer thinks. No more having to pay rent. But his dreams come crashing down, however, when he is informed that although he may have gained vacant possession, he cannot not move into his house because the Certificate of Fitness for Occupation (CFO) is not ready. Months later, he receives a copy of the CFO, and when he asks to be compensated for the delay, the developer says liquidated damages for late delivery (liquidated ascertained damages or LAD) is calculated up to the date of their notice for delivery of vacant possession and not up to the date of the CFO. Who then is to compensate the house-buyer who has to service a housing loan for a house he or she is not allowed to occ...Read More

Compliance cost driving prices up

Cost factor: Developers factor in the utility contribution sums into the house purchase price; the ‘hidden costs’ which developers blame with some justification. YOU may recall from my earlier article that was published in my column titled: “Affordable Housing: How to own it?” that the National House Buyers Association (HBA) was invited to present a paper to the Finance Ministry and we offered 10 pertinent proposals with the view towards affordable housing. This article will continue with the rest of the proposals. Lower the cost While developers face the brunt of complaints about the increasing prices of houses, an important cause hidden away, thus far are the utility companies. The surcharge they add to a development’s fee is something substantial to be considered when purchasing a prope...Read More