KUALA LUMPUR, Oct 23 — Putrajaya’s new RM200 million scheme to help first-time home buyers with their down payment could send the wrong signal as people should be able to afford it on their own, the National House Buyers Association (HBA) said today.

HBA said Malaysians should rent instead of buying a house if they cannot raise the minimum 10 per cent commitment fee required to buy property.

“If buyers could not afford to commit with their own funds (i.e. down payment), he or she is strongly advised to rent instead,” it said in a statement.

It reminded potential house buyers that they should not assume that they would be able to take a loan for the full property price, or 90 per cent of it in this case.

“Buyers must understand that it means taking out a back-breaking loan of 30 years and ‘slaving’ for the bank. They must understand their obligation to repay the monthly loan without fail and to regularly pay the maintenance and sinking fund as well as utility charges,” it said.

In Budget 2016 tabled in Parliament today, Prime Minister Datuk Seri Najib Razak announced that the “First House Deposit Financing Scheme” would help first-time buyers of affordable houses to pay the down payment, but did not specify if the government would subsidise the full amount.

HBA stressed that buying a house can well turn to be “nightmare” for those who cannot keep up with the monthly loan repayments, reminding buyers that their families could be evicted.

The HBA acknowledged however that this “First House Deposit Financing Scheme” would help first-time buyers who do not have the cash to pay the 10 per cent down payment for houses.

“It is definitely better than what it currently being practiced by conniving developers in that the developer increases the selling price by 10 per cent and then offer a rebate of 10 per cent so that the house buyer does not need to make any physical down payment,” it said.

HBA said the government should ensure that its new down payment subsidy scheme benefits only those who buy affordable housing for the first time and live in it, adding that the government should bar these buyers from selling their property for the first 10 years.

The monthly household income of these beneficiaries should be below RM10,000, it said.

The Real Estate and Housing Developers’ Association (Rehda) welcomed the new RM200 million scheme, saying: “Payment for deposit has always been the biggest barrier to house entries and we fervently hope that the deposit will help spur homeownership amongst the rakyat”.