With immediate effect, Bank Negara Malaysia (BNM) reduces the maximum loan-to-value (LTV) ratio to 70% instead of normally as much as 90% from the value of the property.
The limit will be applicable to the third house financing facility taken out by a borrower. However, first and second home buyers are not affected by this new rules. They will continue to be able to obtain financing for their purchases at LTV of 90%
The measure aims to support a stable and sustainable property market, and promote the continued affordability of homes for the general public.
The targeted implementation of the loan-to-value ratio is expected to moderate the “excessive” speculation in the residential property market which has resulted in higher than average price increases in some locations especially urban area such as Klang Valley and Penang.
This has also led to increases in house prices in surrounding locations, thus contributing to the declining overall affordability of homes for genuine house buyers.
In January this year, the government imposed a 5 per cent capital gains tax on property sold within five years of their purchase.
What do you think what will happen with this new rules? Do you think property prices will drop ?
Price ain’t going down even with LTV of 70%. 10% or 30% d/payment make no difference to those rich and speculating the property price in the market. It will slow down the “appreciation” a bit though but eventually, everyone will get used to it and back to normal and it will be business as usual. China is a very good example, LTV was 30% and increased to 40% but property price is still sky rocketing.
Agreed with yr contents. Those who can purchase a 3rd house would have no problem with 30% d/pymt. For married couple, their 3rd house ruling would be their 5th Buy. So don’t foresee any issue here. They just want to curb those who wanted to invest/punt in more than two properties in a single go to blocked other genuine buyers so that they could make a killing on their investment/punting.
Does anybody know if it also applies to Staff Housing Loan Scheme extended to Banks’ staff?
Xanavi,
I believe it apply to all. Anyway, since you are working at the bank, you can easily ask around!.
let say i have 2 house now, A & B. I want to buy C but I sell A before buying.. for C this 70% LTV still apply?