Rehda Institute, MRMA to set up residential REIT to provide rental housing

KELANA JAYA (Nov 13): Rehda Institute is looking at introducing a Residential Real Estate Investment Trust (REIT) which could provide more rental housing to the B40 income group.

Rehda Institute chairman Datuk Jeffrey Ng said it will be submitting the proposal of the Residential REIT to the Housing and Local Government Ministry (KPKT) and Ministry of Finance as soon as the institute completes the studies.

“We are now working with investment banks and accountants. Once we have formalised the proposal, we will submit it to both ministries, and at the next stage, to Securities Commission,” he told reporters during the Budget Commentary 2019 today.

He said that Rehda Institute will work with the Malaysian REIT Managers Association (MRMA), where he is also chairman, to establish the Residential REIT.

He noted that despite the government making certain allocations to provide financial assistance for households earning no more than RM2,300 monthly to purchase a house priced below RM150,000, affordability was still an issue due to other financial commitments.

As such, providing more homes for them through public social rental housing could be a way to improve their livelihood, rather than encourage them to purchase the house.

The proposed Residential REIT is aimed at assisting the government in building up the supply of public social rental housing for those who cannot afford to buy.

On the recently announced FundMyHome platform, Ng said it could be a game changing way to own a house as it brings together the home buyers, investors and developers under one platform.

While it could be an innovative way to boost homeownership for the M40 group, it may not be helpful for the B40 group due to the higher entry cost, he added.

The platform offers properties priced between RM300,000 and RM500,000, which means it requires at least RM60,000 to participate, making it quite hard for the low income group to come up with this amount of money, he said.