My First Home Scheme was first announced in the 2011 Budget by the Malaysian Government to assist young adults who have just joined the workforce to own their first home.
The Scheme allows Malaysians below 35-year old to obtain 100% financing from financial institutions, enabling them to own their 1st home without the need to pay a 10% downpayment.
In 2013 Budget, it was announced that the gross income limit was increased from RM3,000 to RM5,000 per month and certain qualifying criteria were abolished with effect from 1st January 2013.
However, according to a parliamentary written reply from the Finance Minister, since its implementation from March 2011 until July 2013, only 524 applications have been approved. In other words, only 18 young adults managed to realize their dreams to own their first home under this Scheme each month. At the same time, 694 applications were rejected.
Besides that, as at July 2013, the total loan amount approved under this Scheme was only RM86.4 million, an average of RM164,885 per application. It shows that despite the fact that under the My First Home Scheme, young adult is entitled to get 100% loan to purchase a property not more than RM400,000, the ceiling price set by the government is totally unrealistic and impractical.
According to the findings of the Household Income Survey 2012, the mean monthly household income for the top 20% middle 40% and bottom 40% were RM12,159, RM4,573 and RM1,847 respectively.
With 80% of the household earn only an average of RM3,210/month, My First Home Scheme is doomed to fail to benefit the low and middle income group.
The World Bank, in a report last week, had warned that Malaysian households are in for a tough time next year, as prices of consumer goods are expected to rise due to subsidy cuts for fuel.
Abdul Wahid Omar, a Minister in the Prime Minister’s Department, claimed that the government has been cushioning the blow of cutting subsidies and raising prices for the working class. So the question now is, what our government is going to do in line with its aspirations of increasing home ownership amongst the “rakyat”?