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71 pct of loans to first-time home buyers. Positive.

This has been debated continuously. Potential buyers are often worry about their loan applications, fearing that it would not be approved. Earlier article here from my friend Miichael Yeoh on how to increase your chances of approval.  Housing Loan rejection, how to avoid it. Developers are asking for more leniency for first-time home buyers so that these potential buyers can become actual buyers. Here’s an earlier article. Budget 2018 wishlist by REHDA Actually, banks need to lend because that’s how they could earn their profits. Earlier article here: Banks are lending more to the property market; 8 percent higher than 2015  Another point we must all be aware would be the percentage of loans to home buyers versus pure investors. if the latter is accounting for majority of all loans, we better be very worried. To compare loans from 15 banks at the same place, click here. 
In an article in TheStar today, The Association of Banks in Malaysia (ABM) reiterated that its member banks, comprising commercial banks operating in Malaysia, have and will continue to provide home loans to all eligible borrowers. It said, “Commercial banks are in the business of lending and will continue to provide financing to qualified applicants.” ABM added that allegation that banks were imposing strict rules on house buyers who had applied for loans was not true. “In determining the eligibility of an applicant, banks take into consideration various factors such as the applicant’s capability to service the loan.” As long as buyers met the criteria, there are no reason for it to be rejected. It concluded by sharing that, “Financing remains available for eligible borrowers, with 71 % of housing loan borrowers being first-time owners of affordable homes.”
Please take note of the final sentence. “71 percent of housing loan borrowers are first-time owners of affordable homes.” I personally think this is a very healthy sign that as long as one does not overspend or over-stretched their capability, they would still be able to afford an affordable home. While the statement does not mention the actual amount, we can safely assume that these would be units below RM400,000 and that the property market transaction numbers are propped up by these first-timers. Just days ago, it was announced that oversupply in the market for H1 2017 was worse when compared to a year earlier. I think ABM’s announcement has helped allay fears that the property market is collapsing soon simply due to the oversupply of high-end / luxury units. Fortunately for us, the demand for homes remain high BUT it must be priced as low as possible. I think we ought to be very worried within the next few months if the Finance Ministry tells us that the oversupply for H2 2017 are now mostly affordable units below RM400,000. To compare loans from 15 banks at the same place, click here.  Till then, happy viewing and deciding.
written on 21 Nov 2017
Next suggested article: Using bad debts to buy good debts?

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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  1. The banks are right that they are not the cause of housing over-supply with their ‘high rejection rates’. It is the developers who miscalculated by building homes which most people cannot afford. They have only themselves to blame for their greed.
    In Singapore, about 63% of loan applications are first timers. Another 30% have existing mortgages.

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