KUALA LUMPUR: Bank Negara Malaysia’s (BNM’s) Overnight Policy Rate (OPR) cut to 2.75% from 3.0% will stimulate the country’s property market, PropertyGuru Malaysia’s country manager Sheldon Fernandez said today.
He felt that although the OPR rate cut has minimal impact on home loan rates, it is still a silver lining for industry players who were largely overlooked in Budget 2020.
“However, the timing of the (OPR) revision comes as a surprise, with many analysts having anticipated a steady OPR of 3% through January, with some projections extending this to mid-year.
“It is, nevertheless, a boon for Malaysian home seekers stricken by housing affordability, availability and financing challenges, as a step towards a more conducive lending environment,” he said in a statement.
Following a similar rate cut by the central bank in May last year, the market saw a 13% jump in loan approvals, he said, adding that yesterday’s decision by BNM might lift sentiments among potential purchasers.
The latest OPR cut, according to Fernandez, was set against a backdrop of overpriced properties and prevalent loan rejections which had resulted in the residential overhang.
The situation, he added, had dashed aspirations by the younger generation to own houses, forcing the government to place an emphasis on affordable housing.
PropertyGuru Malaysia, according to him, found that about 63% of Malaysians felt the government was not doing enough to make houses in the country affordable.
“However, 30% shared that they have yet to apply for affordable housing schemes and 3% even reported that they did not know such schemes existed,” Fernandez added.
According to the National Property Information Centre (NAPIC), the residential overhang stood at 31,092 units as of the third quarter 2019 which represented the number of unsold units nine months after they were launched.
A recent survey on consumer sentiments by PropertyGuru showed that concerns about pricing and affordability were among factors behind the slow uptake of these units.
The survey also found that many home seekers have not applied or might not even be aware of the numerous housing schemes and financing initiatives designed to help these demographics purchase homes. – Jan 23, 2020, Bernama