End Of The Road For DIBS


With the recent Budget 2014, the Prime Minister, Datuk Seri Najib Tun Razak has announced that the Developer Interest Bearing Scheme (DIBS) will be removed to better manage the burgeoning real property prices in Malaysia.

DIBS is a scheme where a property developer absorbs the buyers’ home loan interest during the construction period of a property.

In recent years, a majority of developers have been offering this scheme for different types of property projects in their bid to entice more buyers. Property projects with this feature were marketed as an easy route to own a property and is particularly attractive to property investors, as it allows them to invest in various properties without coming up with a huge sum of upfront money.

However, it has long been suspected that such packages are not in favour of the buyer as they effectively push up the selling price of the property by 5% to 15%.

Other countries like Singapore have long removed this scheme in 2009 to help curb speculative activity in the property market and Malaysia has followed suit with the recent removal of DIBS.

How will the change in government’s stance in the scheme affect home buyer or property investor? iMoney digs deeper into the matter and lays out the facts for you.

What are the changes?

Prior to Budget 2014, this financing scheme was a prominent feature in many new property projects especially in the Klang Valley. With the new stance, developers are no longer allowed to roll out property projects with this feature.  Financial institutions are also prohibited from providing final funding for projects involved in the scheme.


How does the new policy affect you?

Without this scheme, home buyers will need to make sure they have enough cash in hand to pay the initial payment and service their loan interest upon first disbursement, which can be within one month after you sign the Sale & Purchase Agreement (SPA).

However, it is not all bad news. As it is widely speculated that property developers had been embedding interest from the DIBS into the selling price, property prices could potentially drop with the elimination of DIBS.

Perhaps this move to abolish this financing scheme by the government will help more first time home buyers to realise their dreams of owning their first home.


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