Gerakan Youth proposes govt to build “Rent and Purchase” houses
young working adult is financially incapable to buy a house despite housing loan schemes are offered by the bank. Worse still, banking institutions even reject their loan proposal due to the poor financial status and low-income.
Friday, 13 July 2012
Gerakan Deputy Youth Chief Oh Tong Keong today suggests the government to implement “Rent and Purchase” concept in the 2013 Budget to build more houses to help the young working adults below 35 years old, especially the urbanites to be able to own their first house. This concept was first introduced and implemented by Penang government in the early 70’s for Rifle Range Flats in Penang and it was a concept by paying monthly rental without down payment and the eventual conversion to private ownership upon maturation of the rental period after 25 years.
Oh stresses that our country is facing a litany of challenges that is similar to other fast-developing countries such as Taiwan, Hong Kong and China on which the nation’s younger generation is facing a common social woes such as stagnant wages, a growing wealth gap and steep housing prices that have frozen young urbanites out of the real estate market.
For instance, a terrace house in Penang was priced at RM200,000 in four years ago, but it costs more than RM800,000 now. At the same time, condominium prices also rose from RM200,000 to RM500,000. In view of the skyrocketing housing prices, middle and low-income Malaysians are ever more unlikely to be able to buy houses in the urban areas such as Kuala Lumpur, Petaling Jaya and Penang Island.
“It is reported that 37 % of 18-35 year old young employed workers are struggling to make ends meet. 15 % of them even claimed that they do not practice a saving habit. Therefore, a young working adult is financially incapable to buy a house despite housing loan schemes are offered by the bank. Worse still, banking institutions even reject their loan proposal due to the poor financial status and low-income. Therefore, I wonder how possible is it for a young working adult to be able to own a house even if it is just a low-cost house,” says Oh Tong Keong, who is also Penang Gerakan Youth Chief.
“As a countermeasure for the problem, I propose “Rent and Purchase” concept to the government as a move to help the young working adults below 35 years old to be able to own their first house. In my opinion, instead of putting rising housing prices in check, the government should respond pragmatically with the construction of affordable housing units in satellite cities such as Cheras, Kajang, Puchong, Nilai and Bayan Baru. These houses are meant for young working adults and families with a medium and low-income and it has to be their first housing purchase,” says Oh.
“Those who meet the requisite conditions will be required to sign a loan agreement with the government as the developer and owner of the house unit and pay a monthly rental of RM500 to RM700 for the next 25 years with the total value of the unit is priced between RM150,000 to RM200,000. Once the rental period is completed after 25 years, the government will cede the ownership of the house to the tenant or the agreement holder. However, the tenant is not allowed to resell the house unit throughout the rental period and if the tenant choose to terminate the rental agreement prior to maturation, the house unit will be returned to the government as the owner and it will be reallocated to other young buyers or tenants, while the previous rental fees are not refundable,” adds Oh.