A significant portion of Malaysians, especially younger demographics that make up most of the gig economy, find themselves stuck as renters rather than owners.

The saga of gig workers versus mortgage continues

The booming industry of informal work, or the gig economy, has drastically changed the way we live. From convenience to price, the way of life for Malaysians relying on e-commerce is supported on the backs of gig workers. They rose as the unsung heroes during difficult times, especially during the pandemic, braving layers of safety gears and endless QR codes so the rest of us could stay safe at home. Today, the industry has seen expansions in scope, ranging from e-hailing drivers, food delivery riders, freelance designers and coders.

Gig workers quickly became a permanent feature of the workforce, yet while this flexible economy thrives, many of its workforce are actually finding themselves excluded from one of life’s biggest milestones and that is purchasing a home.

Unlike salaried employees who possess predictable monthly payslips, gig work has a different nature. Irregular income streams, limited credit history and minimal contributions to retirement saving schemes are the typical trade-offs for working flexibly. These realities sit uneasily against the rigid frameworks that banks reference when reviewing mortgage applications.

The result? A significant portion of Malaysians, especially younger demographics that make up most of the gig economy, find themselves stuck as renters rather than owners.

“A significant hurdle for lower-income households and gig workers is their limited access to property financing. Traditional lenders often hesitate due to their credit limitations and irregular income streams, making it harder for them to secure home loans. This lack of access does not just keep them out of the housing market but it also pushes more people into the rental market, driving up demand and consequently inflating rental rates,” said Avaland Bhd strategic planning director David Aw.

Understanding why banks are cautious

From the banking side, the reluctance is less about discrimination and more about risk management. Mortgage defaults are costly and with no secondary market to offload bad loans, banks must tread carefully.

Tropicana Corporation Bhd chief executive officer Ong Chou Wen brought up the fact that lenders’ hands are tied. “The bank’s lending policies, as well as their credit review, are governed by Bank Negara. CIMB, Maybank, it is the central bank’s regulations. They cannot defy that. They are very stringent because they do not want all the bad-performing loans. Banks do not have a marketing arm to sell unpaid properties. They just want to recover their money. That is why the banks still continue to be very strict.”

This highlights a big, red flag structural gap. Unless Bank Negara Malaysia (BNM) adjusts its regulations to allow more flexible covers or underwriting, commercial banks will end up with little leeway to innovate.

Bukit Kiara Properties group managing director Datuk NK Tong raised a broader policy question in response to Ong’s response. “That is a good point to note. I wonder whether Bank Negara’s thinking on property loans is aligned with KPKT’s (Housing and Local Government Ministry) or the national agenda to have housing with everyone.”

Developers suggestions

While developers acknowledge the risks, they also have argued that there are solutions to responsibly widen access to home financing for gig workers. A compilation of their wishlists ranges from rethinking income assessment methods to accelerating government-backed schemes.

Gamuda Land chief executive officer Chu Wai Lune suggested the path of alternative documentation or broader definitions of income proof. “Broaden access to housing finance for emerging income groups, including gig workers and freelancers, by enabling government-backed schemes that accept alternative income documentation such as EPF, SOCSO or consistent e-wallet or bank transfer records. As work patterns evolve, these inclusive measures can help younger Malaysians enter the housing market earlier and with greater confidence.”

Malton Bhd executive director Datuk Hong Lay Chuan proposes recalibrating the assessment framework. “We recommend the development of a more inclusive housing loan profiling method by financial institutions, one that considers gig economy earnings, step-up income potential and interest-only DSR (debt service ratio) calculations during construction.”

Recognising that down payments are another barrier, there was also the suggestion of deposit assistance by Mah Sing Group Bhd group chief executive officer and executive director Datuk Voon Tin Yow, who calls for faster rollout of targeted subsidies. “Accelerate implementation of the Madani Deposit Scheme, where up to RM30,000 subsidy is allocated for homebuyers aged 21 to 40 years old, including workers in the gig economy, for properties priced up to RM500,000. We propose that the funds be channelled directly into the housing loan account or be used as part of the down payment.”

Radium Development Bhd group managing director Datuk Gary Gan believes in enhancing the existing safety net with guarantee mechanisms. “The Housing Credit Guarantee Scheme (SJKP) is a good initiative that protects both lenders and borrowers who would usually be considered high-risk, such as those in the gig economy. With a growing gig economy, it makes sense to strengthen this initiative to enable more people outside of the traditional workforce to get on the property ladder. At present, stringent bank loan criteria and a lack of tailored financial products hamper home ownership among these groups.”

The threat of ripple effects

A key takeaway from the wishlists is that excluding gig workers from the ownership cycle creates ripple effects such as rising rental demand, slower absorption of new housing supply and the further widening of wealth inequality between salaried and non-salaried workers. 

The call for reform is not simply about fairness and the gig economy is not a passing trend. Studies have estimated that the number of gig workers has reached an all-time high of three million in 2023. The figure is expected to rise further as digital platforms and flexible employment models expand. If housing policies remain designed only for traditional employees, a growing segment of the population risks being permanently sidelined.

Striking a balance

The debate is all about finding the sweet spot between caution and inclusivity. On one side, banks and regulators are understandably wary of maintaining financial stability and keeping a close eye on non-performing loans. On the flip side, policymakers and developers are eager to offer solutions that reflect the realities of how Malaysians truly work and earn their living today.

For gig workers, the dream of owning a home feels like it is just around the corner, yet remains frustratingly out of reach. As the housing market continues to wrestle with affordability challenges, whether gig workers are included in the mortgage conversation could greatly influence the future of Malaysia’s property sector.

So, the burning question is not whether gig workers deserve a fair shot at mortgages. It is essential to move on and start questioning whether Malaysia’s financial system is actually finally ready to adapt and embrace a diverse workforce that is definitely here for the long haul.

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