Total loans applied for the acquisition of residential properties increased 16.9% from RM16.87 billion in December 2018 to RM19.72 billion in January 2019, showed statistics from Bank Negara Malaysia.
The figure is also 4.7% higher from January 2018’s RM18.83 billion, reported The Malaysian Reserve.
With this, housing loans approved by banks also increased 6% from RM7.62 billion in December 2018 to RM8.08 billion in January this year. This is also 2% higher compared to the RM7.92 billion loans approved by banks in January 2018.
The increase in loans come as the government kicked off its Home Ownership Campaign (HOC) 2019 in January, an initiative aimed at encouraging home ownership and reduce the residential property overhang.
Under this campaign, property buyers enjoy stamp duty exemptions on loan agreements and for the first RM1 million in value of properties worth up to RM2.5 million. Participating developers are also required to offer a minimum discount of 10% on their units.
Notably, applied residential property loans increased to their highest-level last year after GE14 as well as during the tax holiday period. Applied housing loans stood at RM24.29 billion in July 2018 and RM24.26 billion in August 2018.
Thereafter, loans applied for the acquisition of homes dropped to RM19.35 billion in September 2018, before rising again in October 2018 to RM22.98 billion.
House acquisition in 2018 was likely driven by strong consumer sentiment after the outcome of GE14, which saw the end of 61-years rule of Barisan Nasional.
“Consumer sentiment improved quite a bit after GE14. People felt safer about making purchases, especially those who held back on buying prior to the election,” said an analyst with a research house.