With rent above RM2,300, unions say rent-to-own scheme unaffordable

By Ida Nadirah Ibrahim
Datuk Azih Muda says the HouzKEY scheme is simply unaffordable and will be a waste as they will be paying more and yet have not owned the property during the rental tenure. ― Picture by Saw Siow Feng

KUALA LUMPUR, Jan 18 — Malaysia’s first rent-to-own homeownership plan HouzKEY is unlikely to boost homeownership among low and middle income earners, worker unions said.

The reason is due to the relatively dear monthly rental payments starting from RM2,360.

“There are no income earners in the B40 and M40 categories that can afford such high monthly rental, unless they earn a salary of RM10,000 and above.

“With a salary of RM4,000 and below, along other commitments like car loans, it is simply unaffordable and would be a waste as they will be paying more and yet have not owned the property during the rental tenure,” Congress of Unions of Employees in the Public and Civil Services president Datuk Azih Muda told Malay Mail when contacted for comment on the scheme now open online to buyers in densely populated Klang Valley.

Checks by Malay Mail on the digital platform Maybank2Own, managed by Maybank Islamic Bhd, found that the minimum monthly property rental was priced at RM2,360 based on the onsite eligibility calculator.

Azih said even a RM800 monthly rent would still be considered high for civil servants in the 40 per cent of middle income wage earners, let alone the bottom 40 per cent tier, known as M40 and B40 groups respectively.

He added that government servants would prefer a housing loan scheme that would allow them to own their own homes in a shorter payment duration, compared to renting and then owning the property that might stretch over a lengthy time period.

For them, the sooner they can service their loans, the sooner they get to pay it off.

“For instance, if you rent for 10 years at the start of the age of 30-years-old, and your housing loan is a 30-year term, then you will only finish paying off your loan at 70.

“We urge the government to revise the salary and allowance of civil workers due to the increased cost of living, and to come up with initiatives that would allow them to be homeowners. This kind of rent-to-own schemes will not interest the government servants,” he said.

Malaysian Trades Union Congress president Abdul Halim Mansor saw the rent-to-own scheme as lopsided and not in favour of buyers.

“Looking at the monthly rental offered, this housing plan would only benefit the companies involved and does not offer affordability.

“Such schemes should not be overly publicised as it would create a false hope to the group who cannot afford it to think they could own a home,” he told Malay Mail.

Abdul Halim urged the government to formulate a housing plan that involves the Employees Provident Fund (EPF) and that would allow lower and middle income earners to buy homes at prices they can actually afford.

He said the government should focus on building more affordable homes in order to cater to these groups.

“For those who can afford, perhaps there can be a plan that involves the EPF and allow salary deduction method to ensure that the buyer can afford paying the property.

“Such rent-to-own scheme would not be popular among this group as it does not guarantee that they would be able to afford the home that they have been renting,” he said.

The HouzKEY scheme, launched last November, started accepting applications on a digital platform managed by Maybank Islamic Bhd, which is dubbed Maybank2Own.

The portal features a range of properties from 12 developers including EcoWorld Bhd, SP Setia, Mah Sing Properties, Sime Darby Property, Gamuda Properties, UEM Sunrise, Selangor Dredging Bhd, and Mitraland, and is expecting participation from seven more developers by the end of the month.

According to Maybank Islamic, after the agreement is signed, the property is locked in at a fixed rental price for five years and customers can migrate to mortgage seamlessly after one year of renting, or they can continue renting with 2 per cent step-up on the sixth year until their tenure ends.