NAPIC: 1H2020 residential loan approval rate stands at 34.1%, lowest in 10 years


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PETALING JAYA (September 22): The loan approval rate for residential properties in the first half of 2020 (1H2020) was 34.1%, which is the lowest in 10 years, according to the market report real estate 1H2020 published by the National Property Information Center (NAPIC).

To help boost the weak market battered by Covid-19 and the Movement Control Order (MCO), the government has reduced the overnight policy rate (OPR) by 125 basis points cumulative since March 2019. Although this reduces the cost of borrowing, banks become more cautious about lending.

The NAPIC report, citing data from Bank Negara Malaysia, shows that the total amount of loan applications for the purchase of residential property in the first half of 2020 plunged 24.1% year-on-year to $ 96.45 billion. of RM, while the total amount of approved loans decreased by 39.1% to RM32.84 billion. , which is the lowest amount in a decade.

The larger decline in the total amount of loans approved resulted in a drop in the loan approval rate from 42.4% in 1H2019 to 34.1% in 1H2020, the lowest level in 10 years.

For non-residential properties, the amount of loan applications in 1H2020 was RM30.1 billion, 36.3% lower than in 1H2019. The total amount of loans approved fell 46.9% to RM 9.93 billion, causing the loan approval rate to drop to 33% from 39% in 1H2019. Nevertheless, the loan approval rate is slightly higher than that of 1H2018 which stood at 31.5%.

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