GOVT SEEKS HOUSING LOAN RATE CUT
THE deputy prime minister says the move will ease the burden on house buyers, and help clear the overhang of unsold units. The cabinet will consider the proposal at its next meeting.
THE government, via the National Housing Department, is proposing to lower the housing loan interest rate. Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said the proposal was discussed at yesterday’s HighLevel Committee (HLC) meeting which he chaired.
“The interest rate should be competitive. We had representatives from Bank Negara at the meeting.
“Bank Negara will raise this issue with commercial banks once the cabinet has given its approval,” he said.
The current interest rate for housing loans is about 4.65 per cent.
Zahid said he expected the matter to be tabled at the next cabinet meeting.
He said a more competitive interest rate was needed as some house buyers found it difficult to secure loans.
“This is one of the reasons why 65.17 per cent of houses (about 13,000 units) with a price range of between RM250,000 and RM500,000 were unsold (last year).
“We want to reduce the people’s financial burden (to own a house).”
He said more data was needed to form an accurate picture of the real estate industry so that the government could make the right decisions.
The government had intervened in the past to cap housing loan interest rates for lowand medium-cost houses.
For instance, effective Nov 2, 1992, the government provided an interest subsidy of one per cent per annum to commercial banks and finance companies for approved and firmly committed housing loans costing RM100,000 or less. House buyers were responsible for paying the nine per cent interest rate.
The decision was prompted by complaints from the public that it was difficult to get housing loans from financial institutions to buy low- and medium-cost houses.
This subsidy was meant for first-time buyers of owner-occupied houses with a monthly income of not more than RM1,500 (combined income for married buyers) for the purchase or construction of a house costing RM50,000 or less, and not more than RM2,800 (combined income for married buyers) for houses costing between RM50,001 and RM100,000 each.
Zahid said the committee had agreed to review the temporary freeze on approvals for real estate projects with properties priced at RM1 million and above.
Based on last year’s data from the National Property Information Centre, 12.06 per cent, or 2,518 units worth RM1 million and above, were left unsold last year.
Second Finance Minister Datuk Seri Johari Abdul Ghani last year said the cabinet had decided to freeze luxury property developments from Nov 1.
This was after a Bank Negara report that had warned that unsold residential properties were at its highest in a decade.
Issues discussed at the HLC meeting included a plan to solve the issue of managing all People’s Housing Projects (PPR) via a National Housing Management Corporation (3P) and to introduce a Rent To Own scheme as an alternative for PPR buyers who could not obtain housing loans.