Sabah property developers have praised a government initiative to allow developers to offer housing loans to buyers. — Picture by Saw Siow Feng

KOTA KINABALU, Sept 9 – Sabah property developers have praised a government initiative to allow developers to offer housing loans to buyers, calling it a win-win solution in a slow economy.

Sabah Housing And Real Estate Developers Association (Shareda) president Datuk Francis Goh Fah Shun said the proposal by the Urban Wellbeing, Housing and Local Government Ministry reaffirmed Shareda’s and the Real Estate and Housing Developers’ Association’s (Rehda) findings that the root cause of unsold affordable homes is not the lack of supply, but buyer’s inability to obtain loan approval from banks or end-financiers.

"In this softer economy and stringent loan approval policy from banks, giving a ‘lending’ hand to our buyers would help many of the rakyat to own a home especially those non-bankable applicants,” Goh said in a statement here today.

Urban Wellbeing, Housing and Local Government Minister Tan Sri Noh Omar said Thursday that the ministry was mulling a proposal for housing developers to be issued a money lending licence to help non-bankable house buyers overcome down payment issues.

The proposal would enable property developers to give out loans to buyers at an interest rate of between 12 and 18 per cent per annum to those unable to get a full housing loan from banks, or to those who may only be given a partial housing loan.

Goh said that the association will support the move and encourage its 185 members in applying for the licence to give loans upon endorsement.

Goh said that certain conditions for a money lending license may not be able to fulfill the requirements and will explore another option through a joint venture between Shareda Berhad, state government-linked companies and other bodies to form the Sabah Building Society Berhad, as an end finance business for the long term.

"We also welcome the federal ministry’s plan to build more affordable houses under the Rent to Own (R2O) scheme of Projek Perumahan Rakyat (PPR) which Shareda and Rehda had encouraged in order to assist the eligible group to own homes, by renting first.

"The rental can be later transfer as their 30 per cent deposit or so forth. Will be looking forward to the mechanism to be unveiled by the respective ministry,” he said.