Target Social Mobility Not Home Ownership Says House Buyers Group

---

 
National House Buyers Association secretary-general Chang Kim Loong believes that young people must have the ‘freedom’ to decide whether to become homeowners.PETALING JAYA: The government should focus on promoting social mobility instead of targeting 100% home ownership, says the National House Buyers Association (HBA).
“(This is) so young people have the freedom to grow their financial potential and buy a house when they are capable, and only should they want to,” HBA secretary-general Chang Kim Loong told FMT.
Chang said that unlike previously, many people nowadays no longer regard home ownership as an indicator of success.
Ads by KioskedOn Sunday, local government development minister Nga Kor Ming said the government was targeting 100% home ownership by Malaysians. Presently, 76.9% of the people already own a house, he said.
Chang said property prices were largely unaffordable for many Malaysians given their present income and wage levels.
“Buying and owning a house is a riskier proposition for households compared to renting. Buyers take on enormous debt, sign multi-year loan agreements, and become responsible for homeowners’ costs.
“On top of that, it’s difficult to get loans now that the overnight policy rate (OPR) has been increased. Is it sensible to now buy a house?” he said.
On May 3, Bank Negara Malaysia resumed monetary tightening by adding 25 basis points to take the OPR to 3% following a meeting of its monetary policy committee.
Economist Carmelo Ferlito of the Center for Market Education said the government should instead design a set of rules that promote social mobility.
Ads by Kiosked“We should create initiatives to move people away from poverty so that they can choose to buy a house, if they want to,” Carmelo told FMT.
He said Nga’s target failed to see the trade-off between home ownership and household debt.
“In Malaysia, (household debt) stands at almost 90% of GDP, among the highest in the world and, therefore, is a much more pressing issue than ownership itself,” he said.
According to a study conducted by CEIC Data, Malaysia’s household debt accounted for 81% of the country’s nominal GDP in December 2022, compared to 88.9% in the previous year.
Choy Yue Kwong, a director at property consultant Rahim & Co’s Petaling Jaya office, warned that the government’s 100% ownership target was practically impossible to achieve.
“Many people own several houses, while many others cannot even afford to buy one. So, 100% ownership is only theoretically possible if income is more evenly distributed,” he said. - FMT

---