PETALING JAYA, Jul 14 – SP Setia Bhd asked that Bank Negara Malaysia consider loosening lending rules in a bid to bolster the soft property market, as it applauded its move to cut the Overnight Policy Rate (OPR) by 25 basis points to 3%. An OPR cut is largely expected to be followed by a reduction in lending rates, however under the base rate framework interest rates are determined by the banks’ benchmark cost of funds and Statutory Reserve Requirement (SRR) among others.
“We welcome the reduction of OPR as this will ease the burden on property purchasers servicing their home loans as their monthly repayments for the loans will be lesser and they will have extra money on hand to spend,” SP Setia President & CEO, Datuk Khor Chap Jen said in a statement in response to BNM’s move to cut the OPR.
“This reduction also means that more property purchasers will qualify for home loans and will especially benefit first home buyers. However, despite the lower rates, purchasers are facing tightened lending rules which we hope that the authorities will consider to loosen in order to boost the current soft property market,” he said, adding that the reduction is also good for property developers who have high gearings or plan to borrow future funding from banks as it will reduce the cost of borrowing.