GEORGE TOWN, April 29 — Putrajaya should re-introduce the discontinued Developers Interest Bearing Scheme (DIBS) specifically for first time home buyers, said Penang Real Estate and Housing Developers Association.

Its chairman Datuk Jerry Chan said today that new homebuyers now must service the interest on their home loans even as they continue to pay rent while waiting for the units to be completed, following Putrajaya’s decision to end the scheme in a bid to curb property speculation.

“Previously, DIBS was too lax which resulted in investors using it to speculate in the property sector but if they introduce it only for first time home buyers, it would not be misused for speculative activities,” Chan said.

When announcing Budget 2014 last year, Prime Minister Datuk Seri Najib Razak introduced several measures to curb property speculation that included the cessation of DIBS and an increase in Real Property Gains Tax (RPGT).

DIBS is a scheme where developers will bear the interest on home buyers’ housing loans until the completion of the project.

“The Budget 2014 did not introduce any measures to help first time home buyers to purchase their first homes except for the government affordable housing scheme, PR1MA,” Chan told reporters today.

He said the problem was not with the supply of affordable homes but the ability for first time home buyers to secure loans to buy these homes.

Besides DIBS, he also suggested less stringent rules for housing loan applications by low-income earners looking to purchase their first homes.

“Many of these low income earners have their loan applications rejected so they are unable to buy their own homes,” he said.

He said recently, a housing developers association in Sabah reported that about 70 per cent of the home buyers could not buy their homes due to their loan applications being rejected.

“We believe this is the same case in whole Malaysia where about 50 per cent of home buyers had their loan applications rejected due to strict bank requirements,” Chan said.

He added that the federal government should also consider a way to introduce housing loans only for first time home buyers.