House prices and not loans: Bank Negara
Published on: Thursday, July 21, 2016
Kota Kinabalu: Bank Negara Malaysia (BNM) on Wednesday denied that access to credit has been the problem confronting potential buyers owning affordable homes but fundamental issues that require resolution such as affordability and shortage of supply of reasonably priced houses. The regulatory bank which spoke out for the first time over the lacklustre housing sales as claimed by developers here, pointed out outstanding housing loans continue to expand at double digit growth, recording a growth of 10.6 per cent as at end of May 2016. About 75 per cent of the borrowers or approximately 1.5 million lenders with housing loans are first time house buyers.
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"The responsible financing guidelines by the Bank serve to ensure that individuals borrow within their capacity to repay the borrowings. "It places a responsibility on banks to establish a borrower's income that will be available to meet debt repayments, after allowing for expenditures and contingencies. "This is to protect and prevent individuals from falling into financial hardship due to over borrowing, which ultimately undermines home ownership as a result of foreclosures," the bank said. BNM said this following calls from Sabah developers to review or ease its borrowing guidelines which are making it hard for first time buyers to get loans to buy homes at present.
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BNM also clarified that it does not prescribe to any lending limits, instead lending decision continue to be determined by a bank's business decision, reflecting its own risk appetite and strategies. "As a general rule, all applicants who fulfil the credit criteria and can afford to repay the debt will have access to credit.
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