Home > News > Nation
Friday July 11, 2014 MYT 12:00:00 AM
Friday July 11, 2014 MYT 9:07:59 AM
PETALING JAYA: An increase of 0.25% in the overnight policy rate (OPR) will not have a significant impact on borrowers for low-cost and affordable housing priced between RM45,000 and RM450,000, according to a senior executive of a real estate agency.
VPC Realtors (KL) Sdn Bhd director James Wong said there would only be an estimated marginal increase of RM5 to RM53 per month in loan repayment compared to the previous interest rate for a 30-year tenure with a 20:80 margin (see chart).
“As for high-end residential properties, most buyers are either cash buyers or they buy with a minimum loan margin. Hence, an increase of 0.25% per annum will be insignificant,” he added.
Bank Negara has raised the benchmark overnight policy rate by 0.25% to 3.25%, the first rate hike since June 2011.
Mortgage rates are based on the base lending rate (BLR) which in turn is correlated to the central bank’s OPR.
Wong felt that speculators would be hit the most.
“If they are unable to service the loan, they will be forced to sell. But it will not be as easy as before due to the real property gains tax,” he said.
Wong did not expect rental rates to be impacted by the increase in interest rate as the rental market was primarily determined by demand and supply.
Property consultants expect fewer transactions as mortgage rates will rise in tandem with the interest rate.
Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector president Siders Sittampalam said: “With the interest rate hike, we expect a gradual fall in volume.”
That said, property prices will still be driven by demand and supply.
Bank Negara ups OPR for the first time since 2011
Tags / Keywords:
Property, OPR, BLR, mortgage, property prices, interest hike
Home prices under pressure
JTI cigarette brands up by RM1 too
Site supervisor sentenced to a year’s jail for FB comments
Zeti cautions on cheap money in KL, Yellen suggests rate hike in US
Penang Starwalk attracts more than 20,000 participants
Esplanade abuzz with science
Man dies hours after insisting on drinking banned coffee
MH370: Anifah slams Huffington Post report
PAS’ legal bureau chairman booed and jeered over Selangor MB issue
UPSR leak: NUTP will not help teachers found guilty
Sultan ‘interviews’ MB candidates
Peace feast: Breaking bread in the name of conflict
Life in the big-shot lane
English clubs agree compensation in World Cup dispute
Copyright © 1995-2014 Star Publications (M) Bhd (Co No 10894-D)