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70 pct maximum loan won’t affect local property market ?
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2008/1/18 2:36
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The implementation of a maximum loan-to-value (LTV) ratio of 70 per cent for people buying their third or more houses will not affect the local property market, Housing and Urban Development Minister Datuk Amar Abang Johari Tun Openg said.

He said this was because in Sarawak there were not many property speculators and very few people would buy more than two houses.

Therefore, he said, as far as the state was concerned the supply and demand for properties would not be affected especially with the introduction of exemption for those earning RM3,000 a month from paying the deposit for their first home.

“This group of buyers will not have to pay for the deposit as Cagarmas will be their guarantor. This means Cagarmas will give the assurance to all parties provided the buyers comply with all requirements such as having an income of RM3,000 a month,” he said.

He told reporters this at the State Legislative Assembly (DUN) lobby when asked to comment on the announcement made by Bank Negara that those wanting their third property onwards have to pay 30 per cent of the value of the house.

Abang Johari, was of the opinion that the implementation of the ruling by Bank Negara was a measure to have some control over property speculation.

He said without such control speculators would start buying properties as they like since they can easily obtain loans from financial institutions and such situation will encourage property speculation and at the same time will cause uncontrolled demand.

Later, he said that property speculation definitely existed in Sarawak except that it was rather rare compared to the situation in Peninsular Malaysia, especially in the Klang Valley.

“I have the feeling that one of the reasons why Bank Negara implemented this new policy was because of the widespread property speculation in the Klang Valley,” said Abang Johari.

On Wednesday, the central bank announced that those wanting to purchase their third property onwards have to pay 30 per cent of the total value of the house.

The statement said that the financing facilities for purchase of the first and second homes were not affected and borrowers will continue to be able to obtain financing for the purchases at the present prevailing LTV level applied by individual banks based on their internal credit policies.

“This is further supported by an increase in financing provided for multiple unit purchases by a single borrower, suggesting increasing investment activity that is of a speculative nature,” the central bank said.

Posted on: 2010/11/8 9:53
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