Financing alone not enough to address B40, M40 homeownership, says Nor Shamsiah

KUALA LUMPUR (Feb 11): The issue of homeownership among the bottom 40% (B40) and middle 40% (M40) income groups “cannot be addressed by financing alone", rather by also dealing with the acute supply and demand mismatch and improving house price transparency, said Bank Negara Malaysia (BNM) governor Tan Sri Nor Shamsiah Mohd Yunus.

Speaking during the fourth quarter of 2021 gross domestic product (4Q21 GDP) statistics press conference on Friday (Feb 11), the governor said the central bank had always maintained that the financing model is a key component to support homeownership, with recommendations ready to address the matter.

At the same time, she noted that banks had been highly supportive of homeownership.

“In 2021, banks approved more than RM60 billion [of financing] for first-time household buyers. Of this, more than 60% of new loans approved were for properties priced RM500,000 and below.

“On top of this, there are also numerous guarantee schemes in place to support homeownership, especially for the lower-income group, including Skim Rumah Pertamaku by Cagamas and Skim Jaminan Kredit Perumahan by Bank Simpanan Nasional”.

Nor Shamsiah was addressing comments by Prime Minister Datuk Seri Ismail Sabri Yaakob that BNM would need to review its financing model to make homeownership much easier for the B40 and M40 in line with the "One Family One Home" target.

The central bank governor noted that things had changed since the outbreak of the Covid-19 pandemic, including realities around housing demand, and as such financing models may also need to be adjusted.

“For example, as remote working becomes more common, prospective buyers may be more open to buying properties outside of the city centre.

“There are already rent-to-own financing schemes, and for those working in the growing gig economy with less predictable sources of income, improved access to alternative data such as utility bills and rental payments can be a source of credit assessment by lenders.

“This can be supported by an ecosystem that facilitates greater data sharing, not just among the private sector, but also government agencies,” Nor Shamsiah said, adding that recommendations were outlined in BNM’s Financial Sector Blueprint 2022-2026 published recently.

“The bank has always maintained that while this is key, this is not an issue that can be addressed by financing alone.

“At the end of the day, most housing is still too expensive for many Malaysians. We need to address this too, even as we embark on more innovative financing solutions.

“This includes dealing with the acute supply and demand mismatch in the housing market, improving house price transparency, and ensuring a vibrant rental marketplace is in place for those who are not ready or do not want to own a house,” she explained.

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