With the country on the brink of technical recession, the Real Estate and Housing Developers’ Association (REHDA) and Bank Negara Malaysia (BNM) are working out plans to aid the property market.
“At this point in time, we’re gathering the impact from our members,” said REHDA Vice President and REHDA Selangor Chairman Zulkifly Garib.
Local banks are helping borrowers by not compounding the interest rates on loans during the six-month moratorium unveiled last week, reported The Sun Daily.
This comes following BNM’s announcement on the automatic grace period, which enables borrowers to defer loan repayments starting from April to September, as part of measures aimed at alleviating the financial burden of the people.
BNM revealed that the requirements on lending/financing to the broad property sector will also be relaxed. No further details, however, were disclosed.
CGS-CIMB Research, for its part, expected the central bank to ease rules for the property sector by loosening the 20% lending limit, extending the loan tenure further than 35 years, and boosting the loan-to-value ratio on the third property. It also looks forward to gross income being used to calculate loan approvals instead of net income.
The research house believes that relaxing the lending/financing guidelines in any form will be positive for and helpful to the property market.
Such positive impact, however, could be offset by the negative effects arising from the extension of the movement control order (MCO) to 14 April, which may lead to weaker sales of new properties and lower progress billings, said CGS-CIMB Research.