Is it easy to get the banks to approve our loan application? That was a question I asked the crowd when I was speaking in Johor Bahru yesterday. Many showed the negative sign, which meant that loans are hard to get. Let’s be realistic, banks have to take care of their shareholders and will not be taking up high risks. As soon as they think a certain property is overpriced for example, they will not lend you 90%, even if it’s your first property. It’s more likely that you will get a 80% approval instead. Or lower.
So, if the banks are now approving mortgages worth RM11.12 billion, what does that mean for the property market of Malaysia? Specifically, perhaps it’s due to the vibrancy of the property market of the Klang valley? Smile a bit okay. Okay, whose fault is it when our loan application was rejected? (read here) Latest news as below.
Article in themalaysianreserve.com It was in December 2014 that the loans approved for the purchase of residential property overshot RM11 billion. This is repeating itself. Approved mortgages in Malaysia has hit RM11.12 billion in July 2019 this year. This is attributed to the Home Ownership Campaign (HOC) as well as an accommodative monetary policy.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said, “To some degree, the HOC could play a role since the scheme was extended from June to December this year. I suppose the momentum is still there to support the growth of house financing.”
He added, “I believe an expansionary budget should help promote growth as business and consumer sentiments are weak, while the external sector is highly uncertain. Therefore, it is important to implement the infrastructure projects which have been reviewed previously.”
Sime Darby Property Bhd said the HOC contributed to half of its RM1.4 billion sales in 1H19. Despite this new high, analysts have cautioned that the overall system loan growth is still sluggish. Recently, Maybank Investment Bank Bhd said industry loan growth continued to head south with a 3.9% expansion YoY in July this year versus 4.2% YoY in June. There are much more information in the article. Read it here: Article in themalaysianreserve.com
Forward this article a bit yeah. We have too many negative news floating around. Overhang is still high but if people are getting more mortgages approved, that meant that confidence with the property market is coming back. Unless we go into another financial crisis, the current property market is mostly driven by sentiment instead of people losing jobs and could not afford to buy a property for example. In a crisis, there will be lots of opportunities but one may be too timid to take the plunge. Well, current slowdown represents a small opportunity too. Happy understanding and forwarding yeah.
<Featured Image is courtesy of Stock Photos from Rawpixel.com>
Next suggested article: Negative sentiment but positive luxury car sale?