1. This should be regulated by the SC or BNM, or ministry of Housing, not a private company.
2. On the institutional investors end, it boils down to increased exposure to housing collateral. No matter how you cut it, it means more exposure to real estate. (1.) still needs to cool off the whole housing market, or it will just result in more housing inflation, which is the real cause of the problem: we have an absence of government policies to keep housing affordable, and to reduce speculation.
3. On the consumer end, it increases and improves regulations for group buys of housing if (1, 2.) are properly and holistically executed.
4. Basically this achieves nothing new, except 3.
+5. Upon further reading of other analyses, it seems the consumer investor takes a higher risk and lower reward than institutional investors, in return the consumer investor gets short-term access to physical housing. From that point of view, it's a complete misstep in terms of public policy. The MoF now needs to come out with a strong statement why it would endorse risking the savings of consumers, to cushion the investment losses of corporations, instead of strong-arming policies which ensure: that all citizens have access to housing without long-term financial liability.
+6. Arithmetically, we know that the financing structure amounts to an exotic mortgage anyway. The real question is, is this fancy mortgage better or worse than conventional mortgages. If we don't have a clear intuition, we need to pop open spreadsheets to do some monte carlo simulations for the consumer, and for the institutional investor, to determine what the difference is in terms of quantifiable financial risk, under different macro and micro economic conditions.
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I question the risk management of the housing market and the role of the government in providing consumer/homeowner protections. This OUGHT to be regulated carefully. Owning is not always good. Renting is not always bad. Housing bubbles are generally bad for equality, but if we are only interested in cushioning institutional investments with consumer savings by bribing consumers with the short-term veneer of ownership, then so be it.
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(replaying to someone who said EPF was taxpayer money) to be pedantic: many non-taxpayers have EPF savings. It's for social security. This is an underlying structure. If indeed EPF is supposed to increase exposure to this sector, they should just REIT an entire housing estate, and collect controlled rents from consumers, while working with town planners to ensure that inhabitants have first-world amenities, at commendable costs. This would address both the housing concern and the institutional investor.
Home ownership for the sake of investment is a distraction. Anything that facilitates this just distorts the housing market. Access to housing of a decent minimum standard is a government mandate; under that lens, housing is a public utility and should be regulated as such.
Investors should look elsewhere for returns.
/trollface
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(replying to someone who said that wives do not want to rent, because they live at home, and moving every time you can't renew a rental is expensive)
is this why husbands are over their head in debt? Lol
Will the wives be happier if after five years they have no home, and the price of the home drops, then will they accept their losses as rent well paid or will they cry for help?
If the price of the property drops by 10%, the institutional investor appears to have a put-option that forces the consumer to lose 50% of their initial deposit placed. There is another stated alternative for the consumer, they can take a loan... and then will these be standard mortgage loans, or will they have higher-than-market interest rates because consumers are in a bind? Will the refinancing options be regulated to protect consumers?
(Has BNM/ MoF/ MoH&LG done a thorough risk analysis and simulated the macro/micro-effect of any macro/micro-downturns, including edge *sic* cases?).
Is it apparent to naive retail investors that the five-year term amounts to a liquidation-option held by the institutional investor, which depresses the price of the property at the five-year mark?
The entire program stinks of property speculation. It's cool if the government wants to endorse this - but it needs to be further cooled with rent control policies and more public housing developments to depress the real price of housing the B40 and maybe M40 also.
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