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BNM Urged To Review Financing Model For Home Buyers, Economists Want BNM To Introduce Social Financing Mechanism To Boost Home Ownership, And More


The National Affordable Housing Council (MPMMN) has urged Bank Negara Malaysia (BNM) to review its financing model to make it easier for those in the B40 and M40 groups to own homes. Meanwhile, economists want BNM to introduce some form of social financing mechanisms for such groups of buyers.


1) BNM urged to review financing model for home buyers

The National Affordable Housing Council (MPMMN) – which was chaired by Prime Minister Ismail Sabri Yaakob – wants Bank Negara Malaysia (BNM) to review its financing model to make it easier for those in the B40 and M40 groups to own homes.

“This is to ensure financial institutions allow easier financing for the B40 and M40 groups to own People’s Housing Projects (PPR) units and other affordable homes. The focus will be on direct purchase and rent-to-own (options),” said the prime minister as quoted by Bernama.

He revealed that the council also decided to set a new direction for PPR housing by considering current needs and including new components targeted at realizing the “Liveable Malaysia” agenda. Notably, new PPR projects would consider elements like internet access, fibre connectivity and public transport network.

2) Economists want BNM to introduce social financing mechanism to boost homeownership

Economists have urged Bank Negara Malaysia (BNM) to introduce some form of social financing mechanism to help those in the bottom 40 (B40) and middle 40 (M40) income groups climb the property ladder.

According to Sunway University economics professor Prof Yeah Kim Leng, elements of social financing could be in the form of interest rate ceiling, directed credit and subsidies, reported Bernama.

Malaysia University of Science and Technology economics professor Dr. Geoffrey Williams, on the other hand, wants BNM to modify the terms within the loan financing model.

He noted that the financial institutions can offer multi-generational loans which take into account family members as well as their ability to pay, instead of the fixed loan repayment schedule.

He added the banks could also offer a rent-to-own loan or a long-term rental based on home use.


3) Buy a property based on needs, financial capabilities

Potential homebuyers who are unsure of their job or financial stability should consider renting instead of buying, said Malaysia Institute of Estate Agents President Chan Ai Cheng.

Buyers should understand that property is a medium to long-term investment, she said. As such, purchasing a home should be based on the buyer’s personal needs and financial capabilities and not from the opinion of other persons reported the New Straits Times.

“Purchasing or renting are both great options. Renting gives you flexibility and purchasing builds equity and hedges against inflation,” said Chan.

She noted that property prices have adjusted due to the COVID-19 pandemic and they are not expected to drop any further, barring unforeseen circumstances.

4) Foreign buyers still keen on Malaysian properties, says IBN Corp

Malaysia’s property market continues to be attractive for foreign buyers, especially for properties located in Genting Highlands, Sabah, and Kuala Lumpur said IBN Corp Ltd.

According to IBN Corp Director Megat Khalil Izzuddin Shah, the country remains one of the most ideal place to retire due to its excellent living environment and weather, reported The Malaysian Reserve. Malaysia also offers a highly accessible public transportation system, cheap yet excellent education, and affordable medical costs.

He added that investors like the freehold options as well as the price in exchange for the lifestyle, as compared to what they can get in their home countries such as Singapore, China, Hong Kong, and Japan.

 “Once customers from overseas are allowed to travel again, we believe that there will be a chance for further growth,” he said.


5) Building Material Cost Index rise by up to 3.9% in January


Peninsular Malaysia saw the Building Materials Cost Index (BCI), with and without steel bars, increase 0.2% to 3.9% for all building categories last month.

Datuk Seri Dr. Mohd Uzir Mahidin, Chief Statistician at the Department of Statistics Malaysia (DoSM), said Sabah and Sarawak also witnessed the same trend, with BCI increasing by 0.1% to 3.9% and 0.1% to 3.4%, respectively, reported Bernama.

Steel and cement prices were higher in January, with Kota Kinabalu posting the highest increase in steel prices at 2.4%, while Tawau recorded the highest increase in cement prices at 5.6%.

 “Furthermore, prices of aluminum, iron ore and copper also rose following China’s decision to restrict production of raw materials to reduce pollution as well as slower activity in China,” said DoSM.


6) Lendlease, TRX City acquires additional plot in TRX

Lendlease and TRX City Sdn Bhd further expanded their investment within Tun Razak Exchange (TRX) by buying an additional 0.49ha site in the international financial district.

To be developed into a mixed-use development project, the site is adjacent to TRX’s main pedestrian gateway, the Raintree Plaza, which is connected to the Bukit Bintang shopping belt through a 700m pedestrian walkway, reported Bernama.

Currently, the 60:40 joint venture between Lendlease and TRX’s master developer TRX City is already developing the district’s 6.88ha lifestyle centerpiece, The Exchange TRX.

“We are very pleased with the progress of The Exchange TRX to date, and this contributed to our decision to acquire an additional plot within the master development,” said Stuart Mendel, Lendlease’s managing director and head of Malaysia.

7) MGB Idaman housing projects to enjoy good uptake

RHB Investment Bank Bhd expects the upcoming launches of MGB Bhd for “Rumah Selangorku” Idaman projects to enjoy good uptake, eventually boosting the company’s earnings.

The bank noted that MGB’s latest development in Molek is “competitively priced at RM313,000 per unit compared to the surrounding areas which have an average price tag of between RM280,000 and RM362,700 per unit as it is strategically located near multiple amenities such as hospitals, colleges, and hypermarkets,” reported The Malaysian Reserve.

RHB sees MGB posting core earnings of RM5.7 million for the fourth quarter of 2021, which is an increase of 171% from the previous quarter. With this, the bank maintained its full-year earnings forecast for the company at RM22 million.


It also noted that MGB’s “RM1.88 billion outstanding order book and property development gross development value (GDV) of RM1.47 billion should provide earnings visibility over the next three years”.