Sarawak state government urges banks not to promote credit cards among youths

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  • Saturday, 01 Oct 2011

KUCHING: The state government has appealed to banks to refrain from over-promoting credit cards to youths.

“The banks have not responded to us on this, but I have made it clear to them that credit card debts are becoming a burden to your people. This is especially true among youths,” Housing Minister Datuk Amar Abang Johari Tun Openg said yesterday.

Speaking after the launch of the Sarawak Builders Expo, Johari said the request to the banks was in relation to a new housing loan requirement. Almost all banks will soon base housing loan appraisals on the nett incomes of applicants.

Johari said the requirement was in the public’s interests, and that banks should not be at the mercy of debtors. However, in saying that, Johari said it was also in the public’s interests for banks not to encourage overspending on credit cards.

“According to the statistics and trends I’ve been shown, a section of youths are overspending on their credit cards. The older generation tends to see their credit cards as a ‘last resort’ method of payment. They use their cards more prudently. However, the trend is there to show that youths are spending too much because it is convenient.”

Johari said the purchasing power of youths for houses should not be further eroded by unnecessary spending. He said this was especially true because youths made up a big block of house buyers.

At Sarbex’s opening, much was said about the rise of house prices. Sarawak Housing and Real Estate Developers Association (Sheda) unveiled a list of complaints against Federal and state housing policies.

Sheda said house prices were driven up by more than building material cost. Its president Zaidi Ahmad said in his speech that the private sector could no longer absorb subsidies on low-cost units.

Under state law, the development of any housing estate above about 10 acres must include around 30% of low-cost units. These houses have a state-mandated ceiling price of about RM50,000.

Sheda claims the actual cost of each affordable unit was presently between RM100,000 and RM120,000.

“In this regard, there is an urgent need to eliminate (affordable housing) subsidies (imposed on the private sector).

“Our appeal is that the responsibility of providing low-cost housing should be fully reverted to the government,” said Zaidi.

He said the policy was a “social engineering tool” that was hindering the private sector from further simplifying processes and procedures that can “ensure the investment climate is bright and encouraging”.

This complaint from the private developers is not new.

It is an open industry secret that added cost from the affordable units are passed on to purchasers of medium- and highcost houses. Developers have also in recent years started developing housing estates under 10 acres, thereby, negating the 30% rule.

In mid-year, Sheda issued a strongly worded press statement saying that the policy was forcing up house prices statewide.

Zaidi added yesterday: “House prices may soon be too prohibitive and beyond the reach of the general rakyat.”

Among other suggestions Sheda put up, Zaidi said the state government should convert native land into mixed-zone land within 20-30km radius of major towns and cities for real estate development.

Zaidi also said a Sheda proposal would be finalised before the end of the year and submitted to the state government.

Responding to these requests, the Housing Minister told reporters the Housing Developers (Control and Licensing) Ordinance 1993 would be amended soon, and with private sector inputs.

“Some of its provisions may not be relevant to present day needs.

“The government acknowledges the contribution of industry players towards the economic growth of the country,” Johari said.

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