news

DAP wants BNM to reinstate DIBS for houses below RM400,000

GEORGE TOWN: The DAP has called on Bank Negara Malaysia (BNM) to reinstate the developer interest bearing scheme (DIBS) for buyers of houses costing less than RM400,000 to compensate for any negative inflationary impact and higher loan repayments from the hike in interest rates.”

“The increase in interest rates would have inflationary impact, raise the cost of living as well as dampen consumption spending as more money would be required to service their loans,” said party secretary-general Lim Guan Eng in a statement last Friday.

“This would not only give less money to spend for existing borrowers of all loans, increase the financing cost for businesses leading to higher prices, and also make it more difficult for first-time buyers to get loan approvals.

“One of the main complaints of developers and first-time buyers is the difficulty of getting loan approvals due to the stringent repayment ability requirements imposed by Bank Negara,” said Lim.

BNM last Thursday announced an increase in the overnight policy rate by 25 basis points (bps) to 3.25%.

Following this, commercial banks are expected to increase their deposit and base lending rates (BLR). Maybank has said it will raise its deposit rates by up to 15 bps, while its BLR will be increased by 25 bps from 6.6% per year to 6.85% per year.

Lim said DAP opposed any hike in interest rate that burdened borrowers without any compensating measures that could help them repay or service their loans.

Lim, who is also the Penang chief minister and the Member of Parliament for Bagan, had posed an oral question to Finance Minister Datuk Seri Najib Razak in Parliament last month on whether the DIBS would be reinstated, and was told that there were no plans by the federal government to bring it back.

Lim said the DIBS was a form of interest capitalisation scheme where interest costs are capitalised or built into the sale price instead of being paid by the borrower as they are incurred.



This article first appeared in The Edge Financial Daily, on July 14, 2014.

 

 

Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.
SHARE