Malaysia-based property portal operator The Edge Property Sdn Bhd, a subsidiary of The Edge Media Group, has launched peer-to-peer (P2P) property crowdfunding platform FundMyHome, it said in a statement on Monday.
The launch follows the Malaysia Budget presentation last week when the country finance minister said the government would allow the private sector to engage in a new form of P2P lending scheme, regulated by the Securities Commission Malaysia, to enable home buyers to purchase properties through a crowdfunding model.
The new platform, developed and backed by property portal EdgeProp.my, will feature about 1,000 dwelling units in the first phase of its rollout, all below a price tag of RM500,000 ($120,000).
Through the property crowdfunding platform, home buyers could purchase a home by putting down 20 per cent of the property price, and the remaining 80 per cent would be contributed by participating financial institutions including Malayan Banking Bhd (Maybank) and CIMB Group.
After a commitment period of five years, the home buyer can choose to sell the home, buyout the remaining portion of the property not owned by him or her at market price, or refinance the home either via FundMyHome or a normal bank mortgage.
The investors, meanwhile, will profit from either regular yields, or increases in the property’s value.
According to FundMyHome, this frees up the homebuyer’s funds for other commitments, as there is no monthly repayment as per a conventional mortgage.
“FundMyHome also democratises home ownership and stimulates the housing industry without any government expenditure or guarantees. Housing is also a critical element of wealth as it operates as a vehicle for household saving,” said The Edge chairman, Tong Kooi Ong.
The FundMyHome platform was launched by Malaysian Prime Minister Mahathir Mohamad, who said the country’s pension fund, Employees Provident Fund (EPF) and its members, will be allowed to invest in the scheme to reap good returns.
He said, the government is in support of such crowdfunding schemes, expecting FundMyHome.com to eventually become a full-fledged online property crowdfunding platform after the Securities Commission Malaysia has released the regulatory framework for P2P financing slated for the first quarter of 2019.
A report by EdgeProp.my noted that the portal is still in discussions with the Securities Commission Malaysia and Bank Negara Malaysia to finalise the terms and conditions as well as the framework of FundMyHome.
The Edge Property last raised a $4 million investment in June 2017 to expand the portal’s reach and optimise its features.