KUALA LUMPUR, Sept 11 – A minister's proposal for housing developers to offer unsecured home loans at interest rates comparable to credit cards was never discussed by the Cabinet, Datuk Seri Ahmad Zahid Hamidi said.
The deputy prime minister said Urban Wellbeing, Housing and Local Government Minister Tan Sri Noh Omar has since been told to brief his fellow Cabinet members on the controversial suggestion.
“This was not discussed in the Cabinet and we ask that he give an explanation to the Cabinet about this,” he said during a press conference today after officiating the Makkal Sakti annual general meeting at the Menara Berkembar Bank Rakyat today.
Noh Omar on Thursday announced the introduction of the initiative that enables property developers to give out loans to buyers at an interest rate of 12 per cent with collateral and 18 per cent without collateral.
Noh said that the move is intended to assist Malaysians who are unable to get a full housing loan from banks or those who may only be given a partial housing loan.
However the proposal has been met with fierce opposition, including from his very own colleague Second Finance Minister Datuk Johari Abdul Ghani who deemed the proposal illogical and unsustainable.
The National House Buyers Association and economists told Malay Mail Online on Friday that Malaysia risked a subprime crisis with the proposal for property developers to get moneylending licences.
CIMB chairman Datuk Seri Nazir Razak also spoke out against the "dangerous" idea, saying the focus should instead be on ensuring that house buyers who can afford it are able to access bank loans at fair prices, giving borrowing subsidies to the needy, and providing more affordable housing.
However, the proposal was lauded by the Real Estate and Housing Developers’ Association (Rehda) as it claimed that it will help developers who are currently finding it difficult to sell homes as more home buyers are being denied loans by banks.
Responding to the criticism, the minister said yesterday that his initiative was only a suggestion and his ministry will conduct a comprehensive review of the plan.