The government will propose that the interest rates of housing loans be reduced to ease the burden of buyers, said Deputy Prime Minister Ahmad Zahid Hamidi.

Ahmad Zahid, who is also Home Minister, said the proposal was discussed at the high-level committee meeting on housing issues, chaired by him today and would be brought to the Cabinet for a decision soon.

He said the high interest rate was among the reasons that caused about 3,605 housing units priced between RM250,000 and RM500,000 to be left unsold last year.

“The government will submit a proposal paper on loan interest rates to the commercial banks and further instructions will be issued by Bank Negara Malaysia (BNM).

“The interest rates offered must be very competitive. We have conducted a comparative study with other countries and our interest rates are in the mid range among developed and developing countries,” he said after the meeting at Perdana Putra Building in Putrajaya.

The base lending rate (BLR) in Malaysia is 4.65 percent compared to 5.33 percent in Australia and 1.45 percent in Singapore.

Asked if the banks did not approve the proposal, Ahmad Zahid said : “The proposal is presented by a representative from BNM. Under the BNM jurisdiction, commercial banks needed to comply with all the regulations set by BNM on the matter.”

Ahmad Zahid said many home buyers also had no fixed monthly income and did not have a pay slip to purchase housing units.

At the meeting which discussed coordination, coordinating implementation and resolving issues relating to housing, Ahmad Zahid said the temporary suspension on the programme relating to housing property approval worth RM1 million and above would be reviewed.

He said data analysis of national housing market development was needed to obtain an actual picture of the country’s housing situation to ensure the right decision was made.

Also discussed, he said, was a road map to address the issue of filling and managing the People’s Housing Project (PPR) through the establishment of the Public Housing Management Corporation and introducing a Rent-to-Own method as an alternative approach to assist applicants or prospective buyers of PPR units, who failed to obtain housing financing.

“The government understands the burden due to rising cost of housing and that is why the government is concerned and takes proactive measures jointly with state governments in terms of home ownership.

“The government is always committed to providing quality and affordable housing to ensure the well-being of the people is sustained,” he said.

Ahmad Zahid said the meeting also heard BNM’s proposal to develop integrated databases, implement centralised initiatives for affordable homes and to make home-dwelling rentals as one of the alternatives that could be implemented through the Tenancy Act and Tenancy Tribunal.

- Bernama