KPKT's proposed Deposit Madani sees positive response

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Ho suggested that the  KPKT’s proposals be applied  for purchase of affordable  housing. Picture —YAP CHEE  HONG/The Star

Ho suggested that the KPKT’s proposals be applied for purchase of affordable housing. Picture —YAP CHEE HONG/The Star

Assistance should go towards affordable housing purchase: Rehda

By Yip Wai Fong

The Real Estate and Housing Developers’ Association (Rehda) Malaysia’s endorsement of the KPKT's proposed Deposit Madani scheme is a notable development aimed at making homeownership more attainable for first-time buyers.

The initiative, which includes up to RM30,000 in down payment assistance and a potential return of a DIBS-like scheme, seeks to alleviate the financial challenges that often prevent young professionals and low- to middle-income families from purchasing their first home. DIBS, which stands for developer interest-bearing scheme, was offered from 2009 to 2014.

The Deposit Madani scheme is especially beneficial for the B40 and M40 groups, who often face difficulties in saving the required 10% deposit, according to Rehda. While many can manage monthly mortgage payments, the initial upfront cost remains a significant hurdle. By easing this burden, the programme aligns with KPKT’s vision of providing Shelter for All, promoting social equity in homeownership.

The potential reintroduction of a DIBS-like mechanism, where developers bear the loan interest during the construction stage, could also help first-time buyers by reducing financial pressure during the early stages of home purchase.

To recap, in a statement at the end of August, KPKT Minister Nga Kor Ming said he had led a delegation to the Ministry of Finance (MOF) to present the proposals, worth RM1bil. 

Nga said the Deposit Madani down payment assistance is to alleviate the financial burden of the B40 and M40 house buyers and is in line with the Ministry’s aspiration for every Malaysian to have a place to live (Shelter for All). 

While the Ministry proposed the MOF to further assist first-time home buyers through a DIBS-like mechanism, it must be said that the DIBS scheme previously faced criticism for allowing developers to inflate property prices artificially. Therefore, strict regulatory oversight and clear criteria are essential to prevent market abuse and ensure that such measures are genuinely beneficial to the intended target groups.

“More often than not, the 10% deposit has been a huge barrier to those without enough savings, or youngsters who have just started their career and putting down their roots. Whilst they are able to commit to the monthly repayments, the upfront 10% is a major challenge and REHDA supports any initiative to help Malaysians,” said Rehda president Datuk Ho Hon Sang.

He emphasised that both the Madani Deposit and the DIBS-like scheme should be confined to affordable housing where pricing is controlled to prevent excessive market fluctuations. This restriction would help keep the initiative focused on its primary goal of supporting genuine homebuyers without distorting the broader housing market.

Additionally, the proposed schemes could stimulate broader economic benefits by enabling first-time buyers to allocate more of their resources towards other financial needs, such as current rental payments or emergency savings, thereby improving overall financial resilience. This approach not only supports individual homeowners but also contributes to a healthier and more stable housing market.

Overall, these strategic proposals by KPKT are commendable steps toward improving homeownership rates in Malaysia, addressing long-standing financial barriers that many potential buyers face. However, the success of these measures will largely depend on effective implementation, oversight, and the cooperation of all stakeholders, including developers, financial institutions, and government bodies.

Looking ahead, the industry is hopeful that the upcoming 2025 Budget will include provisions that align with these initiatives, ultimately making homeownership more accessible and sustainable for all Malaysians. The Deposit Madani and DIBS-like schemes represent more than just financial assistance; they are part of a broader effort to foster economic inclusivity and provide a stable foundation for future generations.


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