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Potential house buyers are still wary about making property purchases
despite lower mortgage rates as the economic outlook remains uncertain.
Average mortgage rates have fallen to about 3.5%, but at the same time
banks have been more stringent on the approval of loans. The average
mortgage rate is obtained from
base lending rate
(BLR) of 5.55% minus
1.5% to 2.4% for housing loans (or effective annual rates between 3.15%
and 4.05%), depending on the amount and tenure of loans, and the package
customers sign up for.
The attraction of lower
mortgage rates had been superseded by fears of
income security amid a deteriorating economic outlook. For those who are
still financially sound, most would rather wait a while longer to snatch
up better bargains a few more months down the road. Some are hoping for
developers to come up with more creative and attractive perks and some
are also waiting for prices to drop further, if any, before they are
convinced to buy.
The downside risk for landed properties appeared limited compared to
luxury condominiums, with the demand for landed properties expected to
return by year-end. Most of the
homebuyers in this segment are cash-rich
and not highly leveraged. Given the accommodative interest rates today,
any forced-selling or foreclosures of properties like the one we saw
during the 1997/98 Asian Financial Crisis will be limited in this down
cycle.
The demand for luxury condominiums to decline by 30% to 40% in 2010 from
2008, with luxury condo prices already currently down by 15% to 20%.
A house buyer handled by
RealEstateAgent.com.my said his current mortgage loan interest
rate (BLR-2.40) was 3.15%
for the first two years and 3.45% for the remaining tenure.
He recently signed up for a 20-year conventional home loan from
Alliance
Bank Malaysia Bhd for the purchase of a double-storey house.
He is paying about RM1,700 per month for his RM300,000 loan.
His loan package included a one-time payment of RM2,500 for
mortgage
reducing term assurance (MRTA), legal fees and stamp duty.
Other banks are offering similar mortgage rates.
For example, RHB Bank is charging
BLR minus 2.1% for housing loans that
range from RM250,001 to RM500,000, while
Hong Leong Bank Bhd is offering
BLR minus 2.2% for a RM300,000 mortgage loan.
Malayan Banking Bhd uses a property’s location as one of the criteria to
determine interest rate, but is still offering rates in the region of
BLR minus 2%.
All these banks have BLR of 5.55%. Check the
latest BLR for banks in
Malaysia
HERE.
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