Home sweet home: The lack of affordable homes is the biggest problem, says Bank Negara.
As reported in The Star Online, Bank Negara Malaysia (BNM) said that the lack of affordable homes is the biggest problem for house buyers, not the maximum 35-year loan repayment period.
The central bank was responding to a media report calling for it to extend its loan repayment period for homes from 35 years to 40 years. BNM said the extra five years would do little to ease the burden for borrowers.
“Access to financing is not the main problem confronting potential buyers of affordable houses. The fundamental issues that require resolution are affordability and the shortage of supply of reasonably priced houses,” it said in a statement.
BNM further supported its argument by including a comparison for a loan repayment of RM300,000 over 35 and 40 years with an interest rate of 4.65%. (see table)
The central bank, in 2013, introduced new stringent lending regulations to prevent banks from giving loans to less than credit-worthy individuals who end up defaulting.
The move, however, has been criticised by developers and even state government officials, who say that it hurts prospects for first-time home buyers.
BNM, however, said banks have given out 10.1% more outstanding housing loans, totalling RM460.2bil until July 2016 compared with the same period in 2015.
Click here in order to read the full article as published in The Star Online.
