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Budget 2019: Property crowdfunding platforms for first-time home buyers

November 3rd, 2018 Leave a comment

crowdfunding-property-largeThe government will allow the setting-up of property crowdfunding  platforms which will serve as an alternative source of financing for first time homebuyers, said Finance Minister Lim Guan Eng yesterday.

The first exchange is expected to go live in the first quarter of 2019, after all necessary approvals are obtained from the Securities Commission.

In tabling Budget 2019, Lim said this is a demonstration of the Pakatan Harapan government’s willingness to explore new, technology-enabled and innovative mechanisms to solve the country’s housing problems.

The platform will be regulated by the Securities Commission under the peer-to-peer financing framework.

Under this model, the buyer will be able to acquire a selected property for 20% of the price of the property, while the balance 80% will be fulfilled via potential investors who are interested to fund the acquisition in exchange for the potential value appreciation of the property over a particular period of time.

“In simple terms, Ah Chong, for instance, will be able to own and stay in a RM250,000 property by paying RM50,000 without having to procure a mortgage. Ali who might only be interested in investing in a new property for capital appreciation will fund the balance of the RM200,000 via the peer-to-peer Property Crowdfunding exchange,” he explains.

He noted that this financial innovation will be the first in the world, and if successful, will transform the affordability of homes for first-time home buyers in the country.

Source: EdgeProp.my

 

Categories: Property News Tags:
  1. Penanglang
    November 3rd, 2018 at 19:56 | #1

    Is that so simple as the failed P2P scheme in China ? Brilliant idea ! As most of us are still ignorant ?

  2. Errrr
    November 3rd, 2018 at 21:08 | #2

    If Ah Chong decided to stay long term and not willing to sell or buy 100% of the house in the future?

  3. FongFong
    November 4th, 2018 at 00:17 | #3

    Then you send Ah Long to kau tim it for you.

  4. Carlsuelino
    November 4th, 2018 at 19:27 | #4

    Property Crowdfunding or P2P is something we need to get acquaintanced first. Another question is do you think those so-called investors would “agree to such LONG TERM invesment ?” Since owning a house is a very long time investment, what is they are agitated and want to exist ?

    Our naive and silly govt really needs to learn a lot more before opening their (big,big) mouths !

  5. perkynippy
    November 4th, 2018 at 22:05 | #5

    @Carlsuelino

    As much as I despise our “big mouth” gov who talks big like an uncle “blowing water” at a coffee shop, I do think this property crowdfunding scheme is a good idea. It provides a very good opportunity to develop fintech in our country based on properties, an asset class which commands a huge investment following.

    No doubt, anything new will invite many questions, just like “airplanes were once an outlandish pursuit”, but today they’re the safest way to travel statistically.

    Working through the process of making this fintech work, new regulatory framework, financing schemes that allow efficient risk transfers, and various derivatives can be developed to transform this fragmented and highly inefficient property market to a very efficient one that can reflect true intrinsic property values which is so lacking right now which caused over inflated values and severe oversupplies (Malaysia has the worst oversupply situation in southeast asia right now).

    • Errrr
      November 5th, 2018 at 08:37 | #6

      Actually if they can address all the questionsssss it’ll be a good thing to have and many foreign country will copy the system. Question is if they can fix it.

      Additional point is for this the government need to revamp the requirements for new house. Currently not many developers are providing good quality house cause the law is too lax.

  6. Gabriel
    November 5th, 2018 at 09:53 | #7

    Ah long will prosper…

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