On behalf of iProperty.com.my, Malaysia’s No.1 property site, we would like to share our thoughts on Bank Negara Malaysia’s recent announcement regarding the overnight policy rate (OPR) being maintained at 1.75%. We are very supportive of this announcement as it will continue to provide short-term relief for property owners with existing home loans and lower home loan interest rates for property seekers looking at home financing.
While the recent reimposition of the Movement Control Order (MCO) in select areas in the country will affect economic activity in the short term, the impact will be less severe as almost all economic sectors, including the property sector are allowed to operate.
In addition, Bank Negara Malaysia’s announcement is timely as every ringgit will matter for Malaysians in household spending and securing essential needs. The few hundred ringgit saved on home loan monthly instalments will mean more cash on hand to spend on essential needs such as food, medicine, and child care.
For landlords, low OPR will assist them to save money especially when movements are restricted which resulted in the difficulty of finding tenants. Furthermore, the lower financing cost advantage will help to offset the drop in rental income. That being said, tenants are still in a better position to negotiate rental prices and this has been reflected in slight drops in rental yields.
The current low OPR environment will continue to supplement the ongoing vaccination program and the recent voluntary AstraZeneca vaccination program as our country works toward sustained economic recovery. As of 4th May 2021, over 900,000 people in the country of 32.7 million had received at least one vaccine dose according to health ministry data.
In the foreseeable future, the ongoing vaccination program is again crucial to the recovery of the local property market. The government has secured enough vaccine doses to enable the country to achieve some form of herd immunity by the end of 2021, despite supply challenges and signs of vaccine hesitancy in the short term. Hopefully, we get to see the drop in infection rate which will translate to higher consumer confidence and bolster the property market’s recovery in H2 2021.
Interest in property is encouraging despite the COVID-19 pandemic with more property seekers shifting to digital platforms such as iProperty.com.my to find their dream homes. We believe this trend will continue as more Malaysians turn to the convenience and safety of digital platforms for their property journey. Today, digital platforms are crucial in helping property seekers in making informed decisions, be it buying or renting.
Written by: Shylendra Nathan, General Manager of iProperty.com.my