Low OPR Continues to Provide Short-term Relief to Property Owners

iProperty.com.my (iProperty) General Manager, Shylendra Nathan has released a statement on behalf of iProperty on being supportive on Bank Negara Malaysia’s recent announcement regarding the overnight policy rate (OPR) being maintained at 1.75% as it will continue to provide short-term relief to property owners with existing home loans and lower home loan interest rates for property seekers looking at home financing.

Although the recent re-imposition of the Movement Control Order (MCO) in selected areas of the country would have a short-term effect on economic activity, the implications will be less extreme in the long run since almost all economic sectors, including the property sector, are permitted to operate. Further to that, Bank Negara Malaysia’s announcement is timely, as every ringgit matters to Malaysians when it comes to household spending and securing basic necessities. The few hundred ringgits saved on monthly home loan monthly installments mean more money to spend on necessities like food, healthcare, and child care.

Low OPR can help landlords save money, especially when their movements are limited, making it difficult to find tenants. In addition, the reduced financing costs would alleviate the decrease in rental income. However, renters continue to be in a stronger position to negotiate rental rates, which has resulted in a marginal decrease in rental yields.

As our country works toward sustainable economic growth, the current low OPR environment will continue to complement the ongoing vaccination campaign and the new voluntary Astra-Zeneca vaccination programme. According to health ministry data, over 900,000 people in the country of 32.7 million had received at least one vaccine dose as of 4th May 2021.

In the near future, the ongoing vaccination campaign will be critical to the local property market’s recovery. Despite short-term supply challenges and signs of vaccine hesitancy, the government has secured enough vaccine doses to allow the country to achieve some kind of herd immunity by the end of 2021. Shylendra hopes that a decrease in infection rates in H2 2021, which will lead to increased consumer confidence and support the property market’s recovery.

“Despite the COVID-19 pandemic, interest in property is increasing, with more people turning to digital platforms like iProperty.com.my to find their dream homes. We believe this trend will continue as more Malaysians switch to digital platforms for their property search because of their convenience and security. Today, digital platforms are critical in assisting property buyers and renters in making educated decisions,” as he wrapped up his statement.