PEHAM suggests further OPR cut if COVID-19 persists

PETALING JAYA: Another Overnight Policy Rate (OPR) cut could be carried out to prop up the domestic market and stimulate the property industry, said Persatuan Perunding Hartanah Muslim Malaysia (PEHAM) president Ishak Ismail.

In welcoming Bank Negara Malaysia’s decision to lower the OPR on March 3 by 25 basis points to 2.5% from 2.75%, the second time in three months, the association of Muslim real estate consultants said the rate cut is a brilliant move to spur the economy and the property market.

However, should the present COVID-19 and economic slowdown persisted, another revision of the OPR could be feasible, Ishak told EdgeProp.my.

“Perhaps in 3Q2020, if the situation did not improve, the OPR could be revised once again to preserve the competitiveness of the economy and maintain price stability,” suggested Ishak.

He said the OPR reduction presents first-time homebuyers or young working adults the opportunity to own a home as it translates into lower monthly instalments.

“It will have a profound impact on an individual’s ability to purchase a home and improve demand,” he explained, adding that commercial banks should also provide more attractive loan schemes as well to encourage spending.

He added that existing homeowners can also refinance [their properties] at a reduced rate with the lower base rates put in place by several banks nationwide.

In terms of demand, Ishak noted that there has been a spike in property sale enquiries since the announcement of the cut.

“PEHAM members have received a lot of enquiries from clients on their waiting lists – those who have got their loans rejected due to insufficient income. They have been advised to resubmit their loan applications.

“The response is significant. We really have observed that this OPR reduction will benefit the homebuyers. Hence, we also advise prospective buyers to check with the banks on their loan eligibility, while those who want to refinance to check for better repayment rates.

“OPR cuts will definitely reduce the people’s burden and cost of living while businesses such as hotels and malls could see lower operating costs and improved margins with the rate reduction,” offered Ishak.

PEHAM also commended the government’s move to introduce the Economic Stimulus Package 2020 which included incentives to spur local consumption and to assist those affected by the

COVID-19 outbreak.

“Once again, this will lead to an increase in domestic demand and consumer spending. I am very supportive of this stimulus package,” said Ishak.

He also called on real estate agents and negotiators to produce more quality listings which can help homebuyers to make informed decisions in choosing the right properties.

“Quality listings refer to three criteria. Firstly, the price of the property must be about or lower than the market value. Secondly, the location must be clear, besides being strategic. Lastly, loan eligibility — with the increase in demand from the OPR cut, agents must be ready to ensure the loan eligibility of prospective homebuyers and guide them on securing loans.

“This way, [the agents] can also close more deals and help clear the number of unsold property units,” he said.

This story first appeared in the EdgeProp.my pullout on March 13, 2020. You can access back issues here.