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Contributor
/// Banking and Investment News
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BANKING &
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INVESTMENT
NEWS
The banking and investment industry has a crucial role
to play when it comes to property. Read about the most
recent news and trends in this trade
Banks Mum on New Housing Loan Structure
a marked-up agreement, a qualified
buyer is able to get a much higher
loan than what the property is really
worth.
Walk into any bank today to ask
about these new regulations,
particularly with regards to the
transparency of developers when
launching new projects and how it
is going to affect your housing loan
if you are a purchaser, and you are
unlikely to get clarity because the
details are still unclear.
Property investors, speculators
and home buyers have all been
wondering about the new guidelines
on property and if there is going to
be any change in how banks give out
housing loans.
Under the new guidelines
announced in Budget 2014,
developers are going to have to be
transparent in the way they price
their property by laying bare the
details of the house, how much the
house, legal fees, rebates, “free” gifts
like the air-conditioning, washing
machine, fridge, kitchen cabinets put
in by them, cost.
This then raises questions about
the way banks have been disbursing
loans in the past based on the
developers’ price which of course
includes the renovation and add-ons
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www.PropertyHunter.com.my
put in and factored into the pricing
by the developer .
Because without a valuer to assess if
the price quoted by the developer is
indeed the real market value of the
property, the banks are essentially
accepting the developer’s price
(which includes all the extras) as the
value.
In some cases, developers have
even been “creative” in marking up
a higher price in their sales and
purchase agreements than what the
buyer is actually paying.
That way, they hope to get higher
prices for the other units in the
project that have yet to be sold.
But it has other ramifications for the
individual and banks because with
Association of Banks Malaysia
executive director Chuah Mei
Lin says in a brief e-mail that
the announcements made in
Budget 2014 would now have to
be supplanted by guidelines and
regulations.
“Work is in progress and
announcements will be made in due
course,” she adds.
“In our opinion, the revision in the
real property gains tax and the
curb on Developer Interest Bearing
Scheme (DIBS) may help to avert
unhealthy speculative activities to a
certain extent,” she says.
She adds that ABM would need to
survey the industry on the potential
impact of these announcements. As
it would probably take a bit of time,
she suggests that it would be easier
to approach member banks directly
for their comments.
However, three of the big banks
were mum when approached on
how they are going to structure their
housing loan after this transparency
ruling for developers is in place and
whether buyers will now be eligible
for only 90% of the real value of the
house or be allowed to continue to
get 90% of the loan (like the current
practice) which is based on the price
of the house which includes all the
add-ons and