by Dato' Chris Chin
Youth Housing Scheme
Can you afford a place to call home especially in Klang Valley? It is undeniable that the sharp rise of house prices over the last 2-3 years had created difficulty for many people, especially the youth, who simply cannot afford to buy a house especially in Klang Valley.
A two-bedroom apartment in Klang Valley would cost at least anywhere between RM400,000.00 to RM500,00.00. Even if the bank approves a 90% loan to finance that apartment, the down payment would cost about RM40,000.00 to RM50,000.00. This would mean that a frugal working adult whom are able to save RM1,000.00 monthly, can only afford his first house 40 months later (that makes 3 years plus). Let's face the reality, by 3 years time, that apartment would cost at least 30% more. And can you really save RM1,000.00 monthly by living in KL with the few thousand ringgit salary monthly?Can you afford a place to call home especially in Klang Valley? It is undeniable that the sharp rise of house prices over the last 2-3 years had created difficulty for many people, especially young working adult, who simply cannot afford to buy a house especially in Klang Valley.
Let us look at the scenario below:
A two-bedroom apartment in Klang Valley would cost at least anywhere between RM400,000.00 to RM500,00.00. How much do you need to purchase this two-bedroom apartment?
TOTAL : RM 52,250 -RM65,450
Can you imagine how much you need to save each month in order to afford RM 52,250 -RM65,450?
Malaysia Goverment recognizes the problems faced by the youth of getting their first home. Our Prime Minister YAB Dato’ Seri Najib Tun Razak has announced in Malaysia Budget 2015 the implementation of Youth Housing Scheme which is a smart partnership between the Government, Bank Simpanan Malaysia (“BSN”) as a Development Financial Institution, Employees Provident Fund (“EPF”) and Cagamas Berhad.
This Youth Housing Scheme offers a funding limit for married youth aged between 25 – 40 years with household income not exceeding RM10,000.00 in obtaining their first home not exceeding RM500,000.00. Under the Youth Housing Scheme, the loan period is up to 35 years or up to the age of 65, whichever is earlier. The Government will provide monthly financial assistance of RM200.00 to borrowers for the first two years in order to reduce the burden of monthly instalments. Furthermore, the Government will provide also a 10% loan guarantee enabling the borrower to obtain full financing including cost of insurance such as MRTA. The Borrower can also withdraw from EPF Account 2 to top up their monthly instalment and other related costs.
Extension of Stamp Duty for the Purchase of First Residential Property
The Government is also giving 50% stamp duty exemption on the instrument of transfer agreement i.e. Memorandum of Transfer and loan agreement for the purchase and this exemption will be given until the end of 2016 year. (If you would like to know how much you will need to pay for the stamp duty and legal fees, click here)
If you are eligible for this Youth Housing Scheme, act quick as there are only 20,000 units available on a first come first serve basis.
The only problem is here whether you are able to hunt for property below RM500,000.00.