Loans eligibility still key concern

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Home / Sabah News

Loans eligibility still key concern

Published on: Wednesday, October 29, 2014

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Sabah revenue hits RM6.97 billion: Hajiji says GRS State Government may see full term

Kota Kinabalu: The Sabah Government continued its momentum in managing the economy in line with the commitment and spirit of the Sabah Maju Jaya (SMJ) when it posted record high state revenue of RM6.973 billion last year.

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KINABALU: Eligibility to get home loans will remain a hurdle to first time house buyers in Sabah although the price limit for the My First Home Scheme would be raised to RM500,000 under Budget 2015.

According to Sabah Housing and Real Estate Developers Association President Datuk Francis Goh tighter borrowings will continue to be the main problem despite the government's effort to boost home ownership.

He said to pass this hurdle, banks need to expand the scope of social responsibility, not limiting their CSR in contributions to the needy from their millions of Ringgit in revenue annually.

"Banks are already earning millions of Ringgit in profits annually, but they are keeping a tight lid on risk exposure.

"Imagine with over 2,000 branches across the nation, all it takes for them is to approve about 500 home loans from each branch," he pointed out.

By doing so, he said banks could help the government, which had announced plans to provide a million affordable homes to Malaysians, in boosting home ownership.

Goh said this in response to the government plan to improve the My First Home Scheme by raising the ceiling price of homes to half-a-million in line with the stamp duty exemption.

He reminded that developers are already taking a huge risk in developing homes through the MyHome Scheme which at present, is capped at RM250,000 for a 850 square foot apartment in Sabah, including housing for government servants under the PPA1M.

Goh said plans to carry out the development of 2,250 units under the My First Home Scheme in urban centres in Sabah, with Tawau - 1,000 units, Sandakan- 750 units and Taman Kingfisher in the city- 500 units are also on going.

He however believed the RM500,000 price tag set by the government was over the present market value, saying real property prices in these areas should be within the range of RM400,000 and below.

For the PPA1M, Goh said 1,700 units will be built in Sabah, while another 300 units will be done in Papar through Sabah Housing and Town Development Authority, with up to 20 to 30 per cent facilitation fund, under the Private-Public initiative.

Goh explained there are two known setbacks faced by Sabahans, which are their inability to produce the 10 per cent deposit and secure the 90 per cent home loan.

However, he said almost many failed applications are also caused by their weak credit profile, including filing their tax returns although their income have not exceeded the taxable threshold.

Another point, Goh said many first time house buyers are unaware that under the MyHome Scheme II, they would be able to apply for the 10 per cent deposit on any type of development so as long the housing developer is registered under the Urban Wellbeing, Housing and Local Government Ministry.

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