KUALA LUMPUR: In a move to tackle the rising cost of living, financial advisory firm FA Advisory Sdn Bhd has proposed that the government introduce a mortgage flexibility scheme for first-affordable home buyers.

Its chief executive officer Bryan Zeng said the scheme could bring relief in the form of a lower interest rate for a certain period.

“Maybe for the first five years or so, the interest rate could be reduced to a minimum of one per cent or so. This will put more cash directly into the pockets of those paying for a mortgage,” he said during a media briefing on the Financial Planning Association of Malaysia's Budget 2024 wishlist here today.

“This is another form of targeted (help) we can provide to the rakyat,” he said.

Zeng also suggested that banks allocate a certain amount of affordable financing for first-time buyers.

Another solution would be a rental scheme to reduce the rakyat’s commitment.

He said a feasibility study should be conducted to identify the rent affordable for the B40 and M40 groups and compare this against the market rate.

Zeng also said that the government may consider initiating some sort of “rental guarantee” scheme among developers to rent out vacant units by paying for the difference between the minimum rent and what the tenant can afford.

The government may also consider providing a loan guarantee to developers or owners of new vacant units.

“The government can provide a guarantee on developer’s loan to build affordable housing with a low margin. So the bank would lend to the developer and the developer can build (these affordable units),” he said.

He said the housing mismatch between price and affordability continues to be a vital issue and this has resulted in an overhang in the industry with new developments being built beyond the needs and demand of certain locations.

“We should not only look at the price per se but consider the area holistically.

“How liveable is the location? Is public transport planned properly? Is it accessible to the core economic areas? Is it a place that people want to stay in? These things need a lot of research, planning, and execution,” he said.

Another financial advisory firm UNO Advisers Sdn Bhd expects the government to reduce taxes in Budget 2024 to help the rakyat cope with inflation.

Its CEO Ian Wong said the government may reduce taxes for those within the RM50,000 to RM100,000 income group. -Bernama

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