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Wednesday, September 8, 2010

Proposal to cap housing loan won't dampen mart: Minister

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 is a need for a certain structure to ensure it will 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 a build-then-sell project, in Kuala Lumpur yesterday.

"I leave it to Bank Negara Malaysia 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 is made by genuine buyers. They need a home. That is why they are buying," he said.

Chor was responding to a question as to whether the proposal to impose an 80 per cent loan cap would dampen the property market. The move is expected to be implemented to avert risk of a property bubble.

Recently, Bank Negara was reported to be in discussions with banks on possible moves to curb speculation on property prices.

It was reported that the possible measures, which would likely include the 80 per cent LVR for mortgages, were being targeted at the high-end and non-owner-occupied purchases.

Chor also said that the ministry was seriously looking for partners to revive 47 abandoned housing projects as soon as possible.

By Bernama

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