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Tuesday, September 7, 2010

'Loan mortgages move won't dampen mart'

The proposal to impose a 80 per cent loan-to-value ratio (LVR) for mortgages will not dampen the property market in the long run, said Minister of Housing and Local Government, Datuk Wira Chor Chee Heung.

Nevertheless, Chor said, there was a need for a certain structure to ensure it would not be a burden for the lower-income group to own a house.

"To enable the lower-income group to purchase house, perhaps there could be some kind structures where buyers who want to buy RM500,000 house and below, can still get 90 per cent loans while those who want to buy a house exceeding RM500,000, they can be given a 80 per cent loan," he told reporters after visiting Zephyr Point, an example of build-then-sell project here today.

"I leave it to Bank Negara Malaysia (BNM) to decide the best course but in the long run, I don''t think the 20-80 per cent will dampen the property market as such because today a large percentage of the purchases are made by genuine buyers. They need a home, that is why they are buying," he said.

Chor was responded to a question whether the proposal to impose 80 per cent loan for home buyers would dampen the property market as the move was likely to be implemented to cushion the risk of property bubble. Recently, BNM was reported to be in discussion with banks on possible moves to curb speculation on property prices.

It was reported that the possible measures, which would likely to include the 80 per cent LVR for mortgages, are believed to be targeted at the high-end and non-owner-occupied house purchasers.

Meanwhile, Chor said, the ministry was seriously looking for partners to revive the current 47 abandoned housing projects as soon as possible.

He said the government has allocated about RM200 million to help developers revive these abandoned projects.

"It is not easy for developers to come in and help.
"(However), if there is virtually nothing to be made from reviving these abandoned project, the fund can be use as compensation for these developers," he said.

By Bernama

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