BNM should lower borrowing costs for housing loans: Penang housing exco

GEORGE TOWN: Penang has urged Bank Negara to consider lowering the borrowing costs in view of the high rejection rate for housing loans in the affordable housing category.
State executive councillor for housing, Jagdeep Singh Deo said that the high rejection rate from financial institutions has been cited as the main factor holding developers back from selling their affordable status units.
Referring to a news report, Jagdeep noted that the Real Estate and Housing Developers Association (Rehda) had stated that the rejection rate for housing loans has gone up to 60%.
At the same time, developers have cited a glut in medium cost homes due to the high rate of unsold units throughout the country, including Penang.
"Bank Negara needs to lower their housing loan (rate) as first-time house buyers do not have access to housing loans and the rejection rate is high," Jagdeep told a press conference.
He added that a statement from Bank Negara that there was an under supply of affordable houses was inaccurate.
There were many affordable built houses in Penang from 2008 to 2017, as 24,277 low-cost and medium-cost houses were sold, while 32,248 low-cost and medium-cost houses were approved for construction.
Jagdeep said he has sent an official letter to Bank Negara Governor Tan Sri Muhammad Ibrahim for a roundtable dialogue to address the high housing loan issue along with the various stakeholders including Redha and consumer advocates.
"I hope the proposed dialogue with Bank Negara can yield a solution to this issue."