Bank Negara Malaysia (BNM) will unlikely relax its credit tightening policies, despite pressures from the housing and automobile sectors, according to a report by the Borneo Post.
RHB Research Institute Sdn Bhd (RHB Research) noted that "the money supply and liquidity flow are still strong."
"The continued growth in household loans signal the suppressed demand for properties as well as other big-ticket items moving forward."
BNM's data for the month of April revealed that residential property loans climbed 13.7 percent year-on-year, while non-residential property loans rose at a faster rate of 23.4 percent.
Likewise, during the first four months of the year, residential property loans grew by 13.5 percent as compared to non-residential property loans, which climbed by 22.3 percent.
However, the 70 percent loan-to-value (LTV) mortgage cap for third property financing will no longer be applied to SOVOs (Small Office Versatile Office) or SOFOs (Small Office Flexible Office), as these are categorised as commercial products.
"As they are not under residential title, buyers are not subject to the 70 percent LTV cap imposed by BNM. In other words, this means that buyers will still be able to secure their margin financing of up to 85 percent of the property value, even if the borrowing is the borrower's third mortgage," said RHB Research.
Because of this exemption, more developers are launching SOVO/SOFOs to keep their sales going, amid the central banks' tighter regulations and uncertain economic conditions.
RHB Research also explained that Malaysia's real estate sector is affected by the domestic and global economic outlook
"The economic risk in the Eurozone countries as well as the upcoming 13th General Election in Malaysia and hence the risk premium has already caused an overhang especially in the property sector."
No comments:
Post a Comment