Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi says the government, via the National Housing Department, has proposed lowering the current housing loan interest rate. File pic by MOHD AMIN JALIL.

PUTRAJAYA: The government, via the National Housing Department, has proposed lowering the current housing loan interest rate.

Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said the proposal was discussed at today's High Level Committee meeting which he had chaired.

"The interest rate should be competitive. We have representatives from Bank Negara in the meeting.

"The Central Bank will raise this issue with commercial banks once the Cabinet has given its approval," he told reporters.

The current interest rate for housing loan was about 4.65 per cent.

Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi chairs the High Level Committee (HLC) meeting in Putrajaya. Pic by AHMAD IRHAM MOHD NOOR

Zahid expected the matter would be tabled at the next Cabinet meeting.

He said a more competitive interest rate was needed as some house buyers found it difficult for them to secure loans.

"This is one of the reasons why 65.17 per cent of houses (about 13,000 units) with price range between RM250,000 and RM500,000 were unsold (last year)."

"We want to reduce the people's financial burden (to own a house)," he said.

He said a big data analysis on the country's real estate had to be developed to give an actual picture of the real estate industry so that the Government could make right decisions.

Similar interventions by the government had been made in the past to cap interest rate of housing loans for low and medium house buyers.

For instance, in 1992 the government decided to provide an interest subsidy of 1 per cent to financial institutions to keep the housing loan interest rate at maximum of 9 per cent.

The government's decision was prompted by complaints from the public that it was difficult to get housing loans from financial institutions to buy low and medium-cost houses.

Effective Nov 2, 1992, the government provided an interest subsidy of 1 per cent p.a. to commercial banks and finance companies for approved and firmly committed housing loans costing RM100,000 or less, that is, the customer pays 9 per cent p.a. interest.

This subsidy was meant for first time buyer owner-occupied house with monthly income of not more than RM 1,500 (combined income for married buyers) for purchase or construction of a house costing RM50,000 or less, and not more than RM2,800 (combined income for married buyers) for houses costing between RM50,001 and RM100,000 each.

Zahid also said the committee had agreed to review the decision to review the temporary freeze of approval for RM1milion and above real estate projects.

Based on National Property Information Centre (Napic) 2017 data, 12.06 per cent or 2,518 units worth RM1 million and above were unsold last year.

Second Finance Minister Johari Abdul Ghani had announced last year that the cabinet decided to freeze luxury property developments from Nov 1.

This was following a Bank Negara Malaysia (BNM) report, warning that unsold residential properties were at a decade-high level.

The report also stated that the glut could worsen if the current supply-demand conditions persisted.

Among other things that were deliberated in the HLC meeting include plan to solve the issue of managing all People Housing Project (PPR) via the establishment of a National Housing Management Corporation (3P) and to introduce a Rent To Own scheme as an alternative for PPR's buyers that failed to obtain bank loan.

Bank Negara also proposed an integrated database to implement centralised initiative for affordable houses, formulate a Rental Tenancy Act and form a Tenancy Tribunal.

The committee also discussed mechanisms to compel developers in the state to adopt the Industrialised Building System in construction.

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