Shifting paradigm, the case for renting
A SHORT video was broadcast by KiniTV on March 30, which captured part of a public dialogue session at the Finance Ministry hosted by me and (Youth and Sports Minister) Khairy Jamaluddin on the economic aspect of the TN50 (2050 National Transformation) initiative of the prime minister.
I was wrongly portrayed by KiniTV as urging Malaysians not to purchase houses for their accommodation, but encouraging Malaysians to continue to rent instead.
For clarification, I was merely throwing up the idea of renting houses or accommodation to fellow Malaysians until such a time that they are in a position in their life or career where they are actually ready to commit to such a big financial responsibility.
It is the culture among Malaysians upon entering the workforce to commit themselves to two big financial burdens: i) purchase of automobiles; and, ii) purchase of accommodation.
While the financial commitment for an automobile may last up to nine years, the financial commitment for accommodation can last up to 30 years.
Thus, Malaysians tie themselves up to such a financial burden at such an early stage in their life when they should actually and ideally concentrate on developing their careers instead.
By freeing themselves from having such burdensome financial commitments, they could instead enhance their job mobility by exploring opportunities at other work places, seek or change to different careers or develop their entrepreneurship by starting their own businesses or enterprises.
In more advanced economies, such as European countries, the percentage of house ownership is much lower than it is in Malaysia as the cultural mindset is different.
There is no stigma to renting family accommodation throughout their lives instead of being burdened with financial repayment responsibilities of home ownership.
In Germany, for instance, the percentage of the population who are house owners is at 41 per cent, whereas in Switzerland it is lower at 38 per cent.
If we were to look at Greece, where the population is currently facing economic hardship, home ownership is very high at 73 percent. Burdensome financial commitments are cited as part of their economic woes.
If we were to proceed to live up to the aspirations of TN50, we need, as part of the process, to change our outlook on life and the way we do things in the country.
The concept of long-term rental of accommodation is only one of the many ideas that Malaysians should consider. At the end of the day, Malaysians themselves should evaluate their own living situation to see what will work best to be part of the progress of the nation.
Those who can afford to buy a house at early age, by all means, no one can stop you from doing that. As for the government, we will continue to encourage developers to develop more affordable houses and embark on the rent-to-own concept.
Second Finance Minister
Datuk Seri Johari Abdul Ghani