New Mortgage Lending Rule
The new mortgage lending rule allows LVR only up to 70 per cent for a third housing loan onwards.
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Business Times Online, November 04, 2010
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.
Popularity: 3% [?]
lijat dulu kesannya dalam masa terdekat…
masih ada ruang untuk bot2 kecil teruskan dayungan…
shahbudin(Quote)
dpt beli sebuah rumah pun dah syukur alhamdulillah..jauh sekali sampai nak beli 3 huhuhu..
jas(Quote)
Belon kalau dah terik sangat..bila pecah boleh terkejut pengsan. Beberapa rule perlu dipikirkan:
1. Setiap pembangunan mestilah selaras dengan sumber pendapatan rakyat, barulah ekonomi stabil.
2. Menang sorak tapi kampung tergadai.
3. Buat sesuatu mengikut keperluan bukannya untung semata2. Tidak sihat ekonomi kalu macam tu.
pikir2 lah yee…
xperteam(Quote)
ini tidak adil..tak kan isteri kedua nak kongsi rumah dgn isteri ketiga…mau kahwin empat ni
pendekaR Kundur(Quote)
my sister works in maybank. she is a loan processor. according to her bnm terpakse buat mcm ni to avoid property bubble whereby certain people, mainly Chinese, buat duat duit dgn property. percaye tak korang ade sorang tu ade sampai 10-15 bijik property: tak kire la apartment, rumah atau rumah kedai. so die simply sewakan, jual mahal pon die bole tentukan. imagine bkn sorang je tp ramai lg cina2 buat mcm tu. so bnm tarpakse impose 30% downpayment utk 3rd property. It is something in order to control and prevent from this group took control of the market. otherwise invidual can easily speculate the price and the property can suddenly price-rocketed within a year. in the end of the day, takde sorang pon akan mampu nak beli tak kire la melayu, cine, india property sbb mahal sngt. disebabkan certain people have the access to speculate.
saifudinb(Quote)
Nak kawin lebih dari 2 kene make sure bini no. 3 & no. 4 tu bekerja & ade proof of income so apply rumah guna nama diorg je.. hehe!
NizamJB(Quote)
Dulu Soros dgn RM speculator. Kini ada Property Speculator (Flippers) yg bole mencetus Property Bubbles. Setakat ni mereka bukanlah category smuggle atau yg hoarding barangan komiditi. Cara nak turunkan harga property, kena balik ke basic iaitu guna teori supply vs demand. Boikot je dulu beli rumah yg mahal, sampai satu saat mrk ni akan let go juga property pada harga yg sepatutnya akibat tekanan kewangan.
2bz4money(Quote)
pendapat saya, ini 1 langkah yang baik. sebab memang skarang market property ni melambung2 naik nye. jadi mcm tak logik pulak. kesian kat kengkawan yang baru naik, nak cari ghumah. asal g launching je, sold out. bile ghumah siap, berduyun2 banner naik ‘for sale/rent’. org yang main flip ni, duk untung atas angin je.
zamir(Quote)
ade pro and cons. pembeli susah nak beli dan penjual susah nak jual. most impact will be from property players.
fauzan(Quote)
shahbudin, aku nih termasuk bot2 kecik, cemana nk teruskan?
Kemm(Quote)
perkongsian menarik……thanks for sharing….
auction(Quote)