Following an increase in the Overnight Policy Rate (OPR) to 3.23%, a proposal to reduce housing loan interest across banks nationwide will be presented to the Cabinet soon.
As an increase in OPR rates could hike up monthly installments for home buyers, Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi said a proposal tabled by the National Housing Department aims to ease the financial burden for housing loan applications.
However, he said the proposal required the approval of the cabinet and BNM before it could be set in motion.
“Once the Cabinet provides the green light to the proposal, BNM is expected to meet representatives of commercial banks for further discussion and finalisation.
“One of the reasons why many housing units remain unsold is not just due to the glut but the inability of the people to secure proper financing with the banks,” he said.
Zahid was chairing the High-Level Committee (HLC) on Housing at the Prime Minister’s Office.
Furthermore, the OPR floor and ceiling rates have surged to 3% and 3.50% respectively, while lending rates could also rise by 0.25%
He also stated 13,605 (65.17%) homes priced between RM250,000 and RM500,000 were unable to be sold, while research showed Malaysia ranked in the middle in terms of housing loan interest rates.
“I hope that a competitive interest rate for housing loans can be implemented and complied by all commercial banks to reduce the burden of house buyers.
“BNM has the authority to compel them under its Banking and Financial Institutions Act 1989. However, the final decision on the matter lies with the Federal Government and the Prime Minister,” he added.
Zahid also said that Rent-To-Own schemes and the National Public Housing Management Board (3P) are options available for those who fail to obtain a housing loan.
Meanwhile, the government will also review the freeze on the development of luxury properties worth more than RM1million, after a consensus was met due to minimal data on the country’s housing situation.
Last year on November 19, Second Finance Minister Datuk Seri Johari Abdul Ghani had announced the Cabinet’s decision to temporarily freeze the construction of expensive condominiums and commercial premises to counterbalance the supply and demand of real estate in the country.
The decision was made after a BNM report revealed an overflow of high-end projects, which stripped the market demand for affordable homes. It was uncovered that in the first quarter of 2017, there were 130,690 unsold residential property units with 83% priced above RM250,000.