{"id":33232,"date":"2018-04-09T09:59:09","date_gmt":"2018-04-09T01:59:09","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=33232"},"modified":"2018-05-23T16:14:37","modified_gmt":"2018-05-23T08:14:37","slug":"maybank-houzkey","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/maybank-houzkey","title":{"rendered":"Why Rent-to-own Scheme May Not Be For Everyone"},"content":{"rendered":"

\"in<\/a><\/p>\n

Property prices have\u00a0risen to be 4.4x the median income<\/a>, making the dream of owning a decent property quite out of reach for most Malaysians.<\/p>\n

This automatically drives up upfront costs such as down payment and transactional costs like legal fees and stamp duty<\/a> for the buyer.<\/p>\n

Feeling the increasing financial squeeze due to the unrelenting housing market and high cost of living, the middle-income Malaysians are finding it hard to purchase their first home, or even upgrade their existing home.<\/p>\n

If you are saying that the first step to home ownership is discipline and hard work, we are here to burst your bubble \u2013 it\u2019s not as simple as that.<\/p>\n

Let\u2019s take one of the residential developments under HouzKEY, for instance. It is a 760-square-foot, two-bedroom unit which costs about RM448,000.<\/p>\n

This means, if you are purchasing the unit via a traditional mortgage route, you will need to cough up RM44,840 just for the down payment and don\u2019t forget the transactional costs,\u00a0such as\u00a0stamp duty, legal fees and more<\/a>.<\/p>\n

With the housing withdrawal facility available from the Employees Provident Fund (EPF), you may think it is easy to save for the upfront cost \u2013 but you may be sorely mistaken.<\/p>\n

Using the\u00a0EPF savings calculator<\/a>, we determine how much a typical Malaysian would have in their Account 2 savings.<\/p>\n

If your current salary is RM5,000 and you\u2019ve been working since you were 22 years old with a starting salary of RM2,700, your estimated savings in Account 2 would be RM30,000 at age 35.<\/p>\n

This is assuming a 5% annual salary increment and 6% average EPF dividend per annum. That only makes up 63% of your down payment.<\/p>\n

Even if you were earning a decent salary, saving up such a large amount of money is difficult due to statutory deductions and the unforgivingly high costs of living.<\/p>\n

If you saved 10% of your salary every month, it would take more than five years to save up just the 10% down payment of a RM448,400 property. Let\u2019s take the mean salary of a middle-income household in Malaysia<\/a>, which is RM6,502 per month:<\/p>\n\n\n\n\n\t\n\n\t
Mean monthly salary<\/strong><\/center><\/th>
10% savings<\/strong><\/center><\/th>
Duration to save up to RM44,840<\/strong><\/center><\/th>
Property price after saving duration<\/strong><\/center><\/th>\n<\/tr>\n<\/thead>\n
RM6,502<\/center><\/td>
RM650.20\/month<\/center><\/td>
5 years and 7 months<\/center><\/td>
RM654,279*<\/center><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n*Property appreciation based on NAPIC average rate of 6.5%<\/em><\/font><\/span>\n\n

Unfortunately, we don\u2019t jump into the workforce with that kind of salary. If you start saving with a salary of RM2,700 a month, then it would probably take you much longer than five years to reach the target amount of RM44,840.<\/p>\n

However, by the time you save up for the down payment, the property price would have skyrocketed to RM654, 279, which means you would need an extra RM20,588 just to meet the down payment.<\/p>\n

<\/span>Enter HouzKEY \u2013 a rent-to-own-scheme<\/strong><\/span><\/h2>\n

Maybank introduces its RTO scheme to cater to this segment of the society \u2013 HouzKEY. HouzKEY allows the renter\/buyer to rent a home for 12 months and after that, he\/she has the option to purchase the home anytime at the pre-agreed price. While a rent-to-own (RTO) scheme may seem like a new concept for Malaysians, it has been implemented overseas. For example, Home Partners Of America, for those in the United States, is similar to HouzKEY \u2013 it\u2019s a scheme that allows rental tenants to purchase a home within five years of renting.<\/p>\n

Here are some of the benefits that HouzKEY offer:<\/p>\n