A renting to own a home scheme worked for Hong Kong, can work in Malaysia

LETTER | The "Rent to own home" scheme is a very old concept and initiative used by the Hong Kong government in 1973 to help low-income families in the country to own homes when property prices had escalated beyond their reach.

It was a great idea and project. It was difficult for low-income families to buy a flat in Hong Kong with two or three bedrooms in that time.

Fast track forward, today, it is still relevant for Malaysia to adopt the "Rent to own home" scheme. This should lead the way to get more impoverished Malaysians, low-income families and the homeless, to own their first home, a "house" which they can proudly call their own.

In 1977, the home ownership scheme run by the Hong Kong Housing Authority was launched, building 35,000 flats of which 5,000 were for sale to low- and middle-income families.

The selling prices of homes and condos in Malaysia have skyrocketed in the last two decades, making a home beyond reach for many low wage earners or low-income families.

The Hong Kong government then took the initiative to allow tenants, who had rented government low-cost housing, to convert what they had paid as rental for their units into payment for buying the unit from the government.

Thereafter, what was paid was used as instalment payments to buy the unit. There is no need to take a bank loan.

It was a great help for the impoverished and hardcore poor people who were living from hand to mouth on a shoe-string budget, without any savings.

In Malaysia low income families could use the money saved in EPF to buy the flats on a part payment scheme, paying the rest by monthly instalments.

The scenario was different in Hong Kong 42 years ago. There were many squatters; destitutes and poor people living nights out under flyovers and road ramps, in verandahs of shops and anywhere they could set up temporary makeshift "shacks" or shelter. They were from mainland China. There were many hardcore poor living in cramped cage-like cubicles in rented dwelling houses.

In Malaysia today, we can use the same initiative to low wage earners, and also to see that more low-cost homes are being built every year.

But the government must make low-cost homes cheaper because "affordable" homes are still expensive.

The good thing is the government is allowing those who dwell in low cost flats to buy over the flat after 5 years.