Federal govt proposes lower mortgage interest rate despite higher OPR

PETALING JAYA (Jan 26): The federal government will propose a lower mortgage interest rate to Bank Negara Malaysia despite the central bank raising the overnight policy rate (OPR) by 25 basis points to 3.25% as it seeks to reduce the financial strain on homeowners, reported the Malay Mail Online.

At a high-level committee meeting on housing at Putrajaya, Deputy Prime Minister Datuk Seri Zahid Hamidi said housing loan interest rates should be low enough to be “very competitive” but not impact the economy negatively.

According to him, comparative studies have shown that Malaysia’s interest rate stands at 4.65%, in comparison with Singapore’s 1.65% and Australia’s 5.3%.

Moreover, he noted the importance of data in illuminating the landscape of the property market.

“It was discovered (based on the National Property Information Centre 2017 study) that 65.17%, or 8,050 units, of homes between the price range of RM250,000 to RM500,000 remain unsold.

“This requires the development of big data analytics for the Malaysian residential property market, so the government can get a clearer picture of the housing situation in the country and make more accurate decisions,” he said.

The lower mortage interest rate proposal, along with a review of the directive to freeze residential properties priced from RM1 million that took effect November last year, is part of the National Housing Policy 2.0.

Other suggestions mooted during the meeting were the provision of exemptions or initiatives to affordable housing developers, mechanisms to control property price speculation, a Public Housing Management Body for People’s Housing Projects (PPR), and rent-to-own schemes for tenants of public housing.

Meanwhile, the central bank had proposed that the government start a special coordinating task force for homebuyers’ end-financing.

“The bridging financing directly given by financial institutions is largely settled. It is the end-financing that we need to resolve,” he said.