A housing loan is a common service offered by most banks in Malaysia for its customers who are looking or planning to these properties. In fact, it has been reported that in 2008, more than 80% of housing loans in Malaysia were offered by commercial banks while some were offered by the Treasury Housing Loan Division and only a small fraction were offered by building societies, which was extremely popular in the earlier decades.
The Malaysian Commercial and Property Loan
The common general rule-of-thumb for housing loans in Malaysia is that it can go as high as 90% of the value. Besides that, there are fixed and variable interest rates for these loans. Banks today offer most of these loans as well as Syariah compliant products as well. The price of homes in Malaysia has been growing steadily with a few spikes (although not significant) in the last 10 to 15 years.
Over the years, the Malaysian government has been working relentlessly to provide home buyers the engines and platforms to help them own their first property. Such initiatives were also put in place to ensure that Malaysians were able to enjoy the best products in the market. One such initiative was the HOC or Home Ownership Campaign which was launched in 2019. This was held in collaboration between the Ministry of Housing and Local Government together with REHDA or the Real Estate and Housing Developers’ Association. Besides that, SHAREDA (Sabah Housing and Real Estate Developers Association) and SHEDA (Sarawak Housing and Real Estate Developers’ Association) were also involved.
This initiative was held to help Malaysians own homes at more affordable prices after it was reported that as at Q4 of 2018, residential properties in Malaysia which were unsold totaled to more than 30,000 units valued at almost RM20 billion. Such a situation means that there is a critical mismatch of supply and demand for housing properties in Malaysia.
The Malaysian government will have an annual budget briefing for the Malaysian public around November. This is usually announced by the Prime Minister of Malaysia. The Ministry of Finance is the department responsible for organizing and championing the annual budget. All the input from the stakeholders is taken into consideration months earlier before they are then deliberated through think tanks and brainstorming sessions to derive the budget.
For many editions, the Annual Budget included incentives for home buyers which include deductions, discounts, special schemes and such. These initiatives include tax deductions too as well as easy payment schemes while affordable housing was offered too. Basically, the Budget provides such schemes to help Malaysians at large, ensuring that they enjoy the assistance offered by the government of Malaysia.
Through most of the commercial banks, customers are able to get a housing loan quite easily as long as the credit health is good and ratings are positive. Most housing loan follows the BLR or Base-Lending Rate which could be stretched for many years (30 to 35 years).