Rehda: Credit EPF withdrawals into housing loans

Posted on | September 14, 2007

By THE EDGE

KUALA LUMPUR: The Real Estate and Housing Developers’ Association Malaysia (Rehda) has urged the government to reconsider the proposed mechanism of crediting the monthly Employees Provident Fund withdrawals for housing purpose to contributors’ individual accounts.

Its president Ng Seing Liong said yesterday the “repercussion of such mechanism is huge, and in the end, it may not benefit the contributors and the economy”.

He said such withdrawals should be used strictly to help contributors reduce the burden of their housing loan, and it was crucial that they should not be at liberty to spend it for other purposes.

“Whilst ideally contributors should self-regulate in issues related to finances, the temptation of having extra money to spend may lead them to buying other things or committing to new loans,” he said.

Ng said although domestic spending would be generated, the withdrawals would not help contributors mitigate the high costs of homeownership.

“If the withdrawals are intended to help them reduce their existing housing loan or enhance their housing loan eligibility, the mechanism should be designed to serve such purposes,” he added.

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