CIMB says higher withdrawal cap of EPF savings 'most' promising for Malaysian home buys

KUALA LUMPUR (Sept 23): A higher withdrawal cap on the Employees Provident Fund (EPF) savings appears to be the most viable among proposals to help first-time homebuyers in Malaysia, according to CIMB Investment Bank Bhd.

In a note today, CIMB analyst Saw Xiao Jun said the research house believes the cap needed to be raised to between 60% and 80%, from the current 30%, to have a significant impact on the property market.

"Among all the proposals that have been put forth to help first-time homebuyers, we think a higher cap on the withdrawal of savings from EPF, the government-run retirement fund for all private and non-pensionable government employees, holds the most promise.

"However, we believe the cap needs to be raised to 60% to 80% (from 30% currently) for the impact to be significant. Also, other safeguards must be introduced to protect EPF members’ retirement savings and curb the use of withdrawals for speculative purchases," he said.

Other proposals forwarded by property developers to help first-time homebuyers include higher loan-to-value ratios and reinstatement of the developer’s interest bearing scheme, according to Saw. — theedgemarkets.com

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