Selangor Menteri Besar Mohd Azmin Ali has urged local banks to help resolve end-financing problems faced by potential homebuyers.

He said that during the 1997 Asian Financial Crisis, the federal government and the people had stepped in by setting up Pengurusan Danaharta Nasional Berhad to acquire the banks’ non-performing loans.

Now, as people suffer from the rising cost of living and shrinking disposable incomes, he said it is now time for banks to step up to the plate as corporate citizens.

“I understand that they would have to abide by Bank Negara’s regulations, but I’m certain that the local banks would be able to put some pressure on the central bank and discuss about the demand and the need for Bank Negara to review the current guidelines, so at least the first-time homebuyers can buy houses with the loans,” he told a press conference in Rawang today.

He was speaking to reporters after launching the Setia EcoTempler housing project today, which includes 900 units of affordable housing under the state’s Rumah SelangorKu programme.

Azmin said many developers have approached him, complaining that loan rejection rates had gone up, and in some cases, have exceeded 50 percent.

This increases the holding cost for developers, he said.

Previously in a survey last year, the Real Estate and Housing Developers' Association (Rehda) found that loan rejection was the top reason for developers’ unsold properties, despite demand remaining high for properties.

Bank Negara was also previously urged to extend the maximum loan tenure period for housing loans from the current 35 years to 40 years, but the central bank had turned down the proposal.

Among others, the central bank had said that access to financing is not the main barrier to home ownership. Instead, the problems are in its affordability, and the shortage in supply of reasonably priced houses.

Meanwhile, Azmin said the state’s Rumah SelangorKu programme had exceeded expectations.

He said the original target was to provide 15,000 units of housing within three years of the programme’s launch in 2014.

However, the programme now has 22,494 units that have been launched and still under construction, for which nearly 5,941 offer letters had been issued to qualified buyers.

To ensure that these launches don’t become little more than ‘ribbon-cutting ceremonies’, he said the Selangor Housing and Property Board had been tasked with monitoring the projects on a fortnightly basis.

“For developers who fail to make the Rumah SelangorKu policy a success, they will be blacklisted and there will be no place for them in Selangor,” he said during his speech at Setia EcoTempler’s launch.