Many looking to take advantage of the latest government incentives to stimulate the housing and automobile industries have been disappointed by banks’ tightening their lending.
As reported in China Press, Malaysian Institute of Estate Agents president Eric Lim Boon Ping noted that the government has recently taken a number of measures to stimulate the real estate industry, including the reintroduction of the homeownership campaign, and exemption of stamp duty and real property gain tax.
He was quoted as saying that housing developers have also acted in concert by providing incentives to attract prospective buyers.
“However, we noticed banks have tightened their lending requirements. Recently, a pilot’s loan applications with several banks were all rejected.
“It appears that there are higher requirements for loan applicants from the aviation sector, as well as tourism industries as both sectors, which are hard hit by the Covid-19 pandemic, present a higher risk (of non-performing loans).”
Lim added that it has become harder for would-be house owners to obtain housing loans due to banks’ more stringent criteria for loan approvals amid the pandemic, not to mention the tighter lending policies imposed by Bank Negara Malaysia in 2012.
He advised would-be first-time homebuyers to put their plans on hold and wait for perhaps another five years when they are more secured financially and better qualified for loans.
Meanwhile, Federation of Motor and Credit Companies Association of Malaysia president Datuk Tony Khor said prospective car buyers are also facing more stringent requirements in loan applications, “especially those who are in the higher-risk sectors, such as oil and gas, hospitality and tourism as well as Malaysians working in Singapore”.
Only about 25% of car loan applications are approved.