Zeti denies that Bank Negara may impose more curbs on home loans

Property News/ 22 August 2013 Leave a comment

Investment analysts reassured by this statement although they are cautious about potential Budget 2014 announcements.

Bank Negara Malaysia (BNM) will not introduce new measures to curb household debt as the current ones are sufficient and have produced the expected results, said Governor Tan Sri Dr Zeti Akhtar Aziz (pic) yesterday. This was reported by Bernama after Zeti announced the country’s second quarter growth.

Recent reports cited industry sources expecting more measures aimed at “cooling” the property market, such as further tightening the loan-to-value (LTV) ratio for property purchases and the removal of the developer interest-bearing scheme (DIBS) in the fourth quarter or next year by Bank Negara.

“No, we have not introduced any such measures. We have already announced the measures much earlier and those are the ones in place and we have already seen that the household debt has moderated slightly.”

On July 5, BNM announced a set of measures aimed at curbing excessive household debts: a 10-year cap on the tenure for personal loans, a 35-year limit on both housing and non-residential property loans, as well as a prohibition on pre-approved personal financing products.

“We did not want to see a significant tightening that will cause an over-adjustment because we are depending on consumption activity which is sustainable and therefore, however, we did not want to see household indebtedness that was not sustainable that would, going forward, undermine our growth prospects,” Zeti said.

At this stage, BNM would continue to monitor closely the level of indebtedness and continue with its financial literacy awareness campaigns so that household financials were better managed, she said.

Kenanga investment research analysts commented that they are “positively reassured” by Bank Negara’s statement.

“This firms our theory that overly drastic measures on the sector may affect GDP growth, have a negative cascading effect on the banking system if asset values are affected and more importantly hinders the government’s ability to monetize their infrastructure projects (e.g. rail plus property for LRT and MRT) and their landbanks (e.g. TRX).”

Kenanga also mentioned concerns on the upcoming Budget 2014. “Potential measures include RPGT hikes which we opine is less detrimental to new launches (i.e. listed developers sales) vs. secondary market. Others include stamp duty hikes.

“Nonetheless we are likely to maintain ‘overweight’ on the sector because we believe there will be strong demand for new launches by virtue of better financing terms while many will try to hedge ahead of inflation caused by potential GST, subsidy rationalizations and implementation of Build-Then-Sell schemes. However, we qualify that this is caveat on no major changes in our House strategy.”

“We expect property stocks to rebound today from this reassuring news although we advice investors to be mindful of the Oct-2013 headwinds (UMNO elections and Budget 2014).

“However, if Budget 2014 property measures is not overly severe (e.g. seen in last 3 years), we can expect the sector to rally after a short knee-jerk/breather period.”

Source: StarProperty.my

  1. HUAT
    August 22nd, 2013 at 17:53 | #1

    DIBS is here to stay..
    Seems like BNM will not do anything for the mean time.
    Those who waits for price crash can continue on waiting..
    Those who wants to speculate n invest can buy buy and buy!

  2. Funny
    August 22nd, 2013 at 18:01 | #2


  3. Rachael Choong
    August 22nd, 2013 at 18:12 | #3

    Agree! House prices will continue its march forward. Go ahead and invest, speculate or what ever you want . Let the good times resume!!

  4. Gg
    August 22nd, 2013 at 21:47 | #4


  5. condomana
    August 22nd, 2013 at 22:35 | #5

    C’mon, give that lady a break. Her job is not easy, having to weigh between so many things to keep the economy stable. She’s been talking to the investment community and public this couple of days more than she’s done in the last eight months. Why now?…:)…She must warn speculators that she has enough ammunition to protect the RM if they are thinking of attacking it. Why now?….:)

  6. The Boss
    August 23rd, 2013 at 00:21 | #6

    Sorry but I think some of you here are rather narrow minded. With all honesty I dont think you can find anyone better to head BNM than her. Highly capable individual. Trying to please developers or speculators isnt her goal believe me. A country’s economy is bigger than all that. There are 100 other things I can say which justify her actions however I think it would be a big waste of my time as some of you are not very econ savvy. No offence but true. For the benefit of al,l im not a speculator. I am another ordinary citizen trying to own my first property.

  7. J
    August 23rd, 2013 at 06:39 | #7

    To me, continuing the DIBS may make the property price to crack faster.

    Developers are in much stronger position to hold the properties compared to individual investors.

    New coming investors will not buy from sub sale market.

    So, the existing investors are under pressure with the current poor sub sale market especially when retrenchment took place like below.

    STATS ChipPAC: To Retrench 1,100 Employees And Close Malaysia Plant By 2014.
    28 Jun 2013 17:45
    STATS ChipPAC Ltd. announced the plan to consolidate its leaded wirebond packaging and related test operations in Kuala Lumpur, Malaysia into its Qingpu, Shanghai, China operations over several phases in 2013 and 2014, and the closure of its Malaysia plant by the end of 2014. The plant closure will affect approximately 1,100 employees in Malaysia, representing approximately 11% of the total global workforce…

  8. Funny
    August 23rd, 2013 at 09:54 | #8

    me working in penang US company, we here start to fell the preasure since last year, Management declare so many shutdown so many employee force to take unpaid leave. Any time we will go thru VSS or the worrst retrenchment. For now better do not over commit uf if not u will end up in big financial issue. a href=”#comment-157451″>@J

  9. HUAT
    August 23rd, 2013 at 10:19 | #9

    Sad news indeed talking about retrenchment.
    Within my company, Two production in mexico closing down.
    But we are building another new building to cater for a mass expansion of R&D personnel.
    Sometimes I do not understand what is going on.
    Anyway, U.S based company employee have good pay, good increment. But during recession, they are bound to face serious retrenchment, pay cut and etc.
    Is like, not making money? Cut down expenses! Release all contract employee first. Re-Org!
    Still not enough? Cut those with high paid employee. Close down this and that department. Bla bla bla.. These, we all heard always. But, time will come when things will bounce back! Keep our finger cross that economy downturn dont take place. If they do, Malaysia must bounce back stronger then before!

  10. CS Buyer
    August 23rd, 2013 at 15:22 | #10

    If we look at micro level of property market alone, then it may seems like they are not doing enough.

    But she is more on the Macro level of fiscal policies…..there were some inherited fundamental “misadventures” that cannot be corrected overnight. Then we also compete against regional players which are hungry for foreign funds.

    Many Governments like to do populist policies which are short term gain long term pain.

    If politics have too much hand in the financial system then we are looking for trouble. We should leave it to the experts.

  11. Currency Crisis
    August 23rd, 2013 at 23:05 | #11

    Let’s look at this objectively…

    The Ringgit is being devalued against the US dollar has lost over 10% in the last few months… This says that foreign investment is fleeing the country… What does this mean for the banks??? Well they find it harder to borrow money at cheap rates… So rates have to go up… This is just inevitable…

    The reason that Zeti won’t do anything is because the market will do it for her… Higher Interest rates here we come…

    Lets see the holding power of all these speculators when Interest rate go up… By the way the market controls the interest rate not Zeti…

  12. HUAT
    August 24th, 2013 at 10:44 | #12

    The central bank will maintain the overnight policy rate at three percent as the risks on inflation and GDP growth are well balanced, according to research houses based in Malaysia and Singapore.

    Bank Negara Malaysia’s monetary policy committee, which is set to hold its third meeting this year, will determine the borrowing cost today. If unchanged, it marks the 13th straight meeting since it last increased the rate in July 2011.

    Moreover, economic growth has been healthy, while the inflation level of 1.6 percent in March is considered low, noted economists.

    Hence, the central bank will likely keep the rate at three percent as the risks on GDP growth and inflation are well balanced, explained DBS Bank economist Irvin Seah.

    HSBC Bank added that domestic demand has been robust, but has stayed low due to price controls and subsidies. “Upward normalisation of interest rates will still be necessary later this year, due to rising credit growth and household debt,” it said.

    Meanwhile, the Consumer Price Index is expected to average between 2.7 percent and 2.9 percent this year, said OCBC Bank’s Gundy Cahyadi.

    Thus, the central bank is expected to maintain the overnight policy rate at three percent as the existing inflation trajectory is still within it comfort zone.

    “It has seemed to be more tolerant of the ringgit’s strength since the second half of last year. To a certain extent, this could be their preferred method to dampen any inflationary concerns for now,” added Cahyadi.

    Summing it up, there is theoretically less urgency for the central bank to change the official interest rate at present.

  13. Currency Crisis
    August 24th, 2013 at 15:07 | #13

    First off all it’s laughable to believe what the government or banks have to say,,, Most of the time it’s just propaganda to serve their own interests…

    Second of all the rate the Central bank sets means absolutely nothing to the rates the banks sets… The Central bank can set the rate at 0% if they want the bank will set their rates at what the bond investors are willing to buy the bonds at… Case in point the FED in USA has set the rate a 0% since 2008, yet the bank rates have gone up from 3.5% to 4.5% in the last few months…

    Learn about economics before you just write a bunch of crap you don’t understand…

  14. HUAT
    August 24th, 2013 at 19:36 | #14

    Hey, i just cut and paste to share news. Im not even talking to you la…

  15. zlt
    September 2nd, 2013 at 21:17 | #15

    Funny :

  16. STP2
    September 2nd, 2013 at 23:01 | #16

    I will give non bias comment.

    Property prices will go up in Penang.

    Angel is right. I am in the construction line and we are talking about a hike in cement price and everything else across the board once GST is implemented.

    Those who bought from 2008-2010 got in at a very cheap price. So they wont dump because they know they wont he able to buy cheap anymore.

    Another remark, the bubble here is unlike the ones in America and Europe.

    Our banks dont loan you extra money whenever your property appreciates.

  17. passing by
    September 2nd, 2013 at 23:14 | #17

    What drives property bubbles is an influx of liquidity of easy credit and cheap money. No doubt of that. However, the bubble wont pop because such cheap money doesnt come cheap anymore or isnt that easily available to the public anymore.

    What you will see is a slow down. Price was suppose to stabilize due to affordability issues and access to cheap credit. However, the government increases petrol ans GST. This will certainly cause short term spike in prices.

    Peoplr who bought from 2008-2010 wont panic and sell because their properties would probably double or wejt up by 30 percent.

    Not to mention banks restricted lending in 2012 onwards. So price has stabilized.

    The bubble wont pop because more and more measures are being implemented to slow things down.

    At the end of the day its all about location as well. The rich can easily afford to hold.

  18. Economic Crisis
    September 2nd, 2013 at 23:19 | #18

    Unbiased??? You work for in the construction industry… you lively hood depends on construction to keep growing… So you are very biased.

    regardless of when they brought, the people who borrowed a lot of money who are worried about job security will sell at what ever price when the economy goes down.

    All the banks in Malaysia have Equity home loans or flexi loans (Each bank has their own name for it) so you can refinance and borrow the money as your property goes up in value…

    So I don’t really know what your motivation for spreading misinformation is….

  19. condomana
    September 2nd, 2013 at 23:21 | #19

    @Economic Crisis,

    Don’t worry lah. You can buy PR1MA. RM350k, quality better than Birch The Plaza….:)

  20. Edin Gan
    September 3rd, 2013 at 12:18 | #20

    PETALING JAYA: The number of property launches expected in the second half of 2013 will be higher compared with the first half, trending towards smaller and affordable units according to Real Estate and Housing Developers’ Association of Malaysia’s (Rehda) property industry survey.

    The survey showed that 63% of respondents have product launches in the coming months with 18,181 units in the pipeline, which is 11% higher than the first half of this year.

    Rehda’s findings also found that smaller and affordable units are expected to be the trend of the future as landed property launches drop from 53% in the first half to 38%.

    “There are more strata property in upcoming launches in the second half of 2013, with 15% increase in numbers compared with the first half, coming from Kuala Lumpur, Selangor, Penang and Johor,” Rehda president Datuk Seri Michael Yam said.

    “This is because as property prices go up, developers have to shrink the unit sizes so that the absolute value is within the reach of first-time homeowners and young professionals,” he said. While two and three-storey terrace houses were the most popular property types launched in the first half, condominiums and apartments will take the lead in the coming period.

    In the commercial segment, 48% of upcoming launches will be SoHo (small office home office), SoFo (small office flexible office) or SoVo (small office versatile office) units.

  21. Economic Crisis
    September 3rd, 2013 at 19:57 | #21

    Yes I still invest the same amount… meaning that I always have about 1 mil invested at all times making me 70-80%… Yes I could re-invest into the business and make the business grow, but like I said before I am semi-retired so I don’t want to work so much…. I prefer to enjoy my life…

    Where you are just a slave to DEBT… and have to keep working to pay interest on a property that the bank actually owns….

    I prefer to re-invest in things that will give me a good long term return… I don’t need to gamble and speculate on property… Like all gamblers you will eventually lose… you just been lucky, not smart

  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)