WE may pile kudos on FundMyHome for being the first ever peer-to-peer financing of its kind. But does it solve the problem of affordable homes? We do not think so.
What it does, though, is to offer the developers a chance to sell their unsold houses to investors with deep pockets who are in the market to make money when the property prices go up.
They may even talk up the prices.
On paper, the FundMyHome financing scheme appears good. There is the developer with ready-to-occupy houses; there is a crowd of funders willing to finance them; and there is the house buyer.
All the purchaser needs to do is cough up 20 per cent of the price of the house, let’s say RM300,000.
The remaining 80 per cent is financed by the investors. On closer examination, though, the P2P scheme may turn out to be a nightmare for house buyers. And for investors too.
We may be a country that is on the cusp of being a developed nation, but the truth is we are not a nation of high-income earners. Our median income per month is a mere RM5,228.
We have poor households too. Numbering 24,700 — a big number for this day and age — who earn only RM987 per month.
As for the B40 (the bottom 40 per cent), there are 2.78 million households earning less than RM4,360 a month.
How are these close to three million households going to come up with RM60,000 as an upfront payment? Personal loans from banks, most certainly.
But the paradox is this: these are the very same banks which had turned them away in the first place?
Developers, too, keep dishing out houses that cost between RM300,000 and RM500,000 as affordable homes when they clearly are not.
The overhang in the market is a fundamental signal by the buyers that there is a disconnect between supply and demand.
This should not be rocket science. Prudent businessmen would do everything to respect the sanctity of the market. If developers are seriously interested in listening to the market, they need to build houses that people can afford to buy.
FundMyHome may, however, be good for people with deep pockets who are looking for investment opportunities: T20 (top 20 per cent). But here, too, lurks a danger.
Granted the current overhang of properties may just be an oversupply, not a recession.
But the world is abuzz with a coming recession.
The global stock market tumble of the week of Oct 11 is perhaps one early sign.
Should there be a global recession, the Malaysian property market will surely be hit.
P2P is the wrong end of the stick. The answer to affordable homes lies in a rent-to-buy mortgage scheme.
But the monthly payment must be fit for purpose: it must match the income earned, given the range of Malaysian household monthly earnings — from RM987 of the poor to the median income of RM5,228. P2P financing is an idea whose time has not come.