Housing loan approval rate remains high

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KUALA LUMPUR: The overall housing loan approval rate remains high at 73% in the second quarter of 2017, with similar rates recorded in the major states.

Bank Negara Malaysia’s (BNM) ‘Housing Watch’ website said during the first six months of this year, banks had approved housing loans totalling RM48.5 billion to 183,655 borrowers, out of which 72% were first-time affordable home buyers.

“The approval rate is the ratio of the number of housing loan applications approved to the number of housing loan applications received by the banks during the same period.

“The common reasons for rejection included, among others, applicants having little residual income after taking into account monthly living expenditures and existing financial obligations, poor past track record or financial indiscipline, and insufficient documentation to support the ability to service the loan,” it said.

According to BNM’s Housing Watch, the median house price in Malaysia in 2014 was RM242,000 and this was considered affordable given the median household income was RM4,585.

However, the prevailing market prices in key urban employment centres were beyond the means of the average households, with varying degrees of severity across locations, it said.

Houses in major states like Kuala Lumpur, Penang and Sabah were unaffordable based on household income levels.

“The situation was more acute in key city centres. House prices were most unaffordable in Georgetown, which had the highest median house price (RM600,000) and the lowest median income level (RM4,792),” it added.

In the first quarter of 2017, only 20% of new residential launches were priced below RM250,000, significantly lower than the 33% recorded for the 2010-2014 period.

Quoting data from the National Property Information Centre, the central bank’s Housing Watch stated that 65 per cent of new residential launches in the first quarter of 2017 were priced between RM250,000 and RM500,000.

It said the Malaysian House Price Index increased by 5.3% in the first quarter of 2017 compared with 7.0% in the fourth quarter of 2016, amid a slower growth in both landed and high-rise property prices.

“This reflects a moderation in house prices particularly in Selangor and Johor,” it added. — Bernama


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