fbpx

Malaysia tightens mortgage rules

Property News/ 3 November 2010 Leave a comment

Malaysia’s central bank placed a limit on the loan-to-value ratio for people taking out third mortgages to buy homes in a bid to moderate “excessive” investment and speculation in urban areas.

A maximum lending limit of 70 per cent will take immediate effect, Bank Negara Malaysia, the country’s central bank, said in a statement today. Banks typically provide loans of as much as 90 per cent of the value of the property.

Malaysia joins Singapore, Hong Kong and China in introducing measures to cool their property markets on concerns that asset bubbles are forming as home prices surge. Singapore in August increased down payments for second mortgages and imposed a stamp duty on property held for less than three years.

“Specific locations, particularly in and round urban centers, have experienced faster growth, both in the number of transactions and in house prices,” the central bank said. “This is further supported by an increase in financing provided for multiple-unit purchases by single borrowers, suggesting increasing investment that is of a speculative nature.”

The Kuala Lumpur Property Index, comprising 88 developers’ shares, has surged 28 per cent this year, outpacing an 18 per cent gain in Malaysia’s benchmark stock index.

The targeted implementation of the loan-to-value ratio is expected to moderate the “excessive” speculation in the property market, it said, without providing supporting data.

Malaysian home sales may rise 26 per cent to a record RM52.9 billion (US$17.2 billion) this year, boosted by low lending rates and liquidity, Yeow Yeonzon, an analyst at Kenanga Investment Bank Bhd., said in a report on Oct. 14. Loans applied for purchasing residential properties rose 32 per cent in August from a year earlier to RM15.4 billion, according to central bank data.

The government in January imposed a 5 per cent capital gains tax on property sold within five years of their purchase. — Bloomberg

SOURCE: Business Times

Tags:
RELATED PROPERTIES FOR SALE/RENT AT
  1. No comments yet.
  1. No trackbacks yet.
(You can also Login/Register to submit your comment using unique ID)


Comment Guidelines
  • Avoid political discussion.
  • Comments with inappropriate wordings or personal attack may be moderated or deleted.
  • Developer must register before comment. All anonymous comments claimed to be from developer without registration will be deleted.
  • All advertisement in the comment will be deleted. Please contact us for advertising details.



To advertise your property in this page under "Related Properties for Sale/Rent":
 1. Submit your property at PenangPropertySale.com, it's FREE!
 (Please do not advertise your property in the comment)