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State housing committee chairman Jagdeep Singh Deo said repayment periods could also be extended beyond the usual 30 years on a case-to-case basis.
Speaking in Komtar today on his wish list for tomorrow’s budget announcement, he said the high rejection rate of loans had been a barrier to first-time buyers despite the plentiful supply of affordable homes.
Countries such as the UK, Japan and Sweden allow dual-generation loans, also known as intergenerational loans, in which parents and their children take home loans for a longer mortgage period.
Jagdeep said the government could also consider imposing rent-to-own schemes on developers.
He said banks could collect rental for the first five years, which could later be converted to deposit payments.
He said tier loan repayments such as staggered loan repayment amounts and lower interest rates could also improve the situation.
In the long term, he recommended that the government introduce a permanent policy to reduce the price of homes.
“Penang has consistently lobbied for Bank Negara and all stakeholders to review the stringent policies where first-time affordable home buyers are concerned about their loan applications.
“It is hoped that the issue will be addressed with the introduction of some of these mechanisms,” he said.
He also voiced hope that the budget would provide more federal housing for the poor through the Peoples’ Housing Project (PPR), 1Malaysia Housing Project (PR1MA) and 1Malaysia Civil Servants Housing Project (PPA1M).
He said a total of 62.46 acres in 10 lots of land had been set aside for consideration for the construction of more PPR housing. He added that Penang has the lowest number of PPR units in the country, at 999 out of a total 110,000 nationwide.
Jagdeep, who is also Penang’s local government committee chairman, suggested that incentives be given to state governments which implement smart city solutions such as LED street lamps and CCTV cameras.
He said Penang had converted about 30,000 street lamps to LEDs and was in the process of increasing CCTV coverage from the current 897 to 1,047 by mid-2019.
“The federal government currently contributes 50% to the electricity bill for street lighting. With the conversion to LED lights, we hope to save some 60% in bills,” he added.
“We hope in the budget that the electricity bill for street lamps will be fully borne by the federal government as a form of incentive to get more to convert to LED and implement a low-carbon city initiative.”
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