Bijak Wang

Bank Negara Malaysia may make it harder for Malaysians to buy more than two houses as it seeks to stem speculative buying that is pushing up property prices.

Sources said the central bank would be meeting with banks next week to discuss plans for a mortgage cap whereby loans would be limited to a portion of the property value.

“The expectation is a cap of about 70-80 per cent. We think a directive will be issued to cap,” said two sources with knowledge of the meeting.

Earlier, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said it was prepared to take pre-emptive action and that it has wide-ranging instruments to prevent a property bubble.

“We want to promote house ownership, but we want it to be done in an orderly manner and we don’t want speculative activities,” she told reporters on the sidelines of the Global Islamic Finance Forum in Kuala Lumpur yesterday.

She acknowledged that there may be pockets of bubbles forming in parts of Malaysia, but believes Malaysian banks are dealing with this through their own risk management process.

Areas like the Klang Valley and Penang have reported strong property demand.

In June this year, some 147 double-storey terrace houses just outside of Kuala Lumpur priced from RM1.75 million each were sold out in just five hours.

Rising property prices have been fuelled by low borrowing costs, the continuing promotions by developers and expectations of a recovering economy.

More money is also flowing into Asia from developed economies where interest rates are low as investors seek higher returns elsewhere.

But this is not unique to Malaysia. Regulators in China, Hong Kong and Singapore have imposed measures to cool their property markets.

Zeti also said that “massive” financial literacy programmes would be rolled out as a pre-emptive measure.

These would be aimed at those aged below 30 to help them better manage their finances at the start of their careers.


Sumber : Business Times, 29 October, 2010 , http://www.bebas-hutang.com

Bank Negara Malaysia has put in place a rule that allows banks to lend only up to 70 per cent of the house value.

The new mortgage lending rule, which applies only to borrowers taking up a third housing loan, is meant to curb excessive investment and speculative activity in urban areas.

“While Malaysia is not experiencing a general property price bubble, targeted pre-emptive measures are appropriate to moderate the increases in property prices that are evident in select locations, arising from purchases that are speculative in nature.

“This measure is expected to moderate excessive investment and speculative activity in the residential property market and to ensure affordability of homes for genuine house buyers,” Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said in her keynote address at the Financial Industry Conference in Kuala Lumpur yesterday.

She gave the assurance that financing facilities for the purchase of first and second homes would not be affected and that borrowers would still be able to obtain financing for these at the current loan-to-value ratio (LVR) applied by individual banks, based on their internal credit policies.

The new rule takes effect immediately. Banks were previously not subjected to any curbs on mortgage lending.

The Association of Banks in Malaysia (ABM), whose members comprise the country’s 23 commercial banks, supported Bank Negara’s move, saying that it was “timely and pre-emptive”.

“While the banking sector is wholly in support of house ownership, we agree that appropriate measures should be adopted to avert unhealthy speculative activities which could lead to a property bubble,” its chairman Datuk Seri Abdul Wahid Omar said in a statement yesterday.

Abdul Wahid, who is also the chief executive officer of top lender Malayan Banking Bhd (Maybank), said the move was not expected to dampen or have an adverse impact on the growth of residential property development, nor on the banks’ house financing business.

The ABM and its member banks had engaged with Bank Negara on the matter prior to the latter coming out with the ruling.

A banking analyst from a foreign brokerage noted that most banks, particularly the bigger ones, already adopt strict LVR on borrowers taking up a second, and especially third, housing loan, with location also being an important factor.

As such, the analyst agreed with Abdul Wahid that the new rule was not likely to have a big impact on the banks’ mortgage business.

“On a third loan, it’s already quite hard to get an 80 per cent LVR now,” she remarked. For a first loan, banks usually lend up to 90 per cent of the house value, or even up to 100 per cent in some cases.

The country’s biggest mortgage players by market share are Public Bank Bhd, CIMB Bank Bhd and Maybank.

Property developer Mah Sing Group Bhd also does not see the new rule hurting overall sentiment of the market significantly as it comprises mainly first-time buyers and upgraders.

Neither does its group managing director Tan Sri Leong Hoy Kum see a property bubble building up as the price increases have been largely those of properties with good concepts by well-known developers and in good locations.

Zeti, in her speech, noted that residential property prices in the country had increased steadily in tandem with economic development and rising household income.

“In the more recent period, however, certain specific locations, particularly in the urban centres, have experienced faster growth, both in house prices and the number of transactions. Supporting this trend has been the increase in financing for multiple-unit purchases by a single borrower. This suggests investment activity that is of a speculative nature,” she said.

Property prices in Malaysia rose 5.6 per cent in the first quarter of this year and 4.2 per cent in the second quarter, according to Bank Negara.

Sumber: Business Times Online, November 04, 2010