FREE MALAYSIA TODAY. 7TH JULY: Stagnant wages, inflation and declining ringgit are greater factors influencing property market activity, they say.
Property experts have downplayed the impact of Bank Negara Malaysia’s (BNM) decision to maintain the overnight policy rate (OPR) at 3% on the property market.
PPC International Sdn Bhd’s managing director Sidsapesan Sittampalam said that BNM’s cautious stance will not encourage more consumers to buy property as there is no pent-up demand in the market.
“I don’t think it (BNM’s decision) is going to attract buyers unless there’s a reduction in the OPR. There’s no pent-up demand in this case and the market will remain stable,” said Sittampalam.
Managing director of VPC Alliance (Malaysia) James Wong similarly felt that the OPR decision will not have a significant impact on the property market compared to other factors.
“Most buyers do not qualify for housing loans, due to lower salaries and higher cost of living, as well as inflation. Thus buyers are finding it more difficult to get a housing loan,” said Wong.
He said that the majority of properties being constructed by developers cater to the middle and higher income groups, with prices starting at RM500,000 or higher.
“This pricing will deprive a lot of potential homebuyers from purchasing (property) because their salary does not qualify them to buy houses in this (price) range.
“Thus, those with incomes ranging from RM3,000 to RM4,000 are not able to afford buying a property ranging from RM500,000 or more,” said the managing director.
Chartered surveyor Ernest Chong presented a different perspective on the topic.
He said that individuals should have greater accountability in determining their own affordability before acquiring a property, rather than attributing blame to BNM for adjusting the OPR as part of their mandate.
“As long as BNM doesn’t increase the OPR, you cannot blame BNM as it is more to the individual’s accountability,” he told FMT Business.
Borrowers, he said, should be prepared to service higher interest charges, which are largely influenced by OPR movements.
BNM’s monetary policy committee yesterday decided to keep the OPR steady at 3% in a widely expected move.
In a statement, the central bank said at the current OPR level, the monetary policy stance is “slightly accommodative and remains supportive of the economy”.