KUALA LUMPUR ― The government’s introduction of crowdfunding platforms like FundMyHome as an alternative home financing solution to banks is laudable, property consultancy Knight Frank Malaysia said.
However, it advised the authorities to be vigilant in checking the profiles of first-time homebuyers and fund managers to ensure the mortgage crisis that hit the US over too-easy lending does not happen in Malaysia.
“The availability of Property Crowdfunding platforms will make property more accessible for first-time homebuyers who may not easily qualify for bank loan,” Knight Frank Malaysia managing director Sarkunan Subramaniam said in a statement.
“However, there is concern that this may fuel overly lenient lending policies, potentially leading to future subprime situation, a lesson drawn from the United States where homebuyers with inadequate financial capacities were able to secure mortgages.”
Sarkunan urged the Securities Commission especially to be watchful of such crowdfunding platform managers who may be tempted to build up their portfolios too quickly by lending to first-time homebuyers with compromised financial credibility as they may not be able to repay their loans later.
Such a scenario could disrupt the property crowdfunding platforms, he said.
“Subsequently, the funds’ portfolios should be reviewed regularly to ensure that the investors’ investments are secured,” Sarkunan said.