Foreign Property News | Posted by Si Thu Aung
Malaysia is stepping up efforts to boost home ownership and address supply glut in the property market with the launch of a one billion ringgit ($243 million) fund to offer cheaper mortgages to lower-income groups.
Credit from the so-called Affordable Housing Fund will be extended by six lenders that include Malayan Banking and CIMB Group Holdings to first-time home buyers, according to Bank Negara Malaysia.
Interest rate on loans for houses costing up to 150,000 ringgit is fixed at 3.5% under the fund, the central bank said.
"However, this fund should be seen as a temporary facility for a limited period," BNM Governor Nor Shamsiah Yunus said at the fund's launch.
"Affordable housing issue requires holistic solution with every party involved so that it could be solved in shorter time."
The fund comes as the government grapples with sluggish wage growth and high cost of living as property prices soared in key cities.
Meanwhile, the economy is showing signs of fatigue with several consumers delaying or scrapping purchases of big-ticket items such as real estate.
Further, past efforts to tighten lending regulations and crack down on speculative activities have squeezed credit flow, and in part contributed to a massive property overhang in the third-largest Southeast Asian economy.
Authorities now aim to clear some 30,000 unsold homes worth more than 22.5 billion ringgit.
"If there is an opportunity, we will extend this fund beyond the targeted two years, depending on demand," Finance Minister Lim Guan Eng said at the fund's launch.
On Monday, the government unveiled the National Housing Policy that outlined five focus areas, 16 strategies and 57 action plans until 2025.
Among its target, the government is seeking to build one million units of affordable homes for the bottom 40% income group within the next decade.
Ref: Property Report
