KUALA LUMPUR: The Association of Banks in Malaysia (ABM) said member banks, which comprise commercial banks operating in Malaysia, remained supportive towards providing housing loans to eligible house buyers including first-time buyers and those buying properties in the affordable segments.
ABM said the evidence was in the overall loan approvals from the banks worth RM161bil for house financing to more than 375,000 borrowers in 2017.
Up to 71% of housing loan borrowers were first-time owners of affordable homes, ABM said. Also, 2017 saw housing loan approval rates of 73% compared with 73.8% in 2016.
“Our member banks are in the business of lending and will continue to provide home financing to eligible borrowers while adhering to responsible financing guidelines to mitigate against financial risks for both the banks and the borrowers,” it said.
ABM said house buyers needed to be cognisant of their loan eligibility and affordability based on their current financial circumstances, and select properties based on these parameters.
This is to ensure that borrowers are not overly burdened by financial obligations.
ABM said the key causes of loan rejections may include, but are not limited to, insufficiency of income to support the loan amount applied, high level of financial commitments compared with income levels, adverse credit history, weak documentation or banking records and the inability to service the loan.
ABM also said there are various flexible financial products under the Government’s home ownership initiatives.
Housing and issues related to affordability have dominated the property sector for years. Housing that the masses can afford is in short supply. However, the slow property market over the last couple years has also threw up a new issue – unsold units.
According to Bank Negara, the level of unsold residential properties in Malaysia stands at a decade-high of 146,497 units for the April-June 2017 quarter, an increase from 130,690 units in the January-March 2017 quarter.
Bank Negara’s definition of unsold units includes serviced apartments as well as unsold units during the construction period while the National Property Information Centre’s (Napic) definition excludes serviced apartments which are built on commercial land.
Napic’s overhang definition includes completed units which have been deemed fit for occupation by the local authorities but remain unsold.
Napic, in its latest residential stock report at the end of January, also reported that residential stock for July-September quarter in 2017 saw a rise to 5.40 million units against 4.91 million units a year ago, an increase of 10%. All states saw a rise in residential stock.
Under the completed residential units, the figure rose by more than 85% in the nine-month period ending Sept 30, 2017 to 73,791 units, compared with 39,791 for the same period a year ago.
Incoming supply of residential units for the nine-month period to September 2017 dropped by 43%, from 837,251 units in 2016 to 480,060 units as developers slowed down or put launches on hold.