KUALA LUMPUR, Jan 23 — Bank Negara Malaysia’s (BNM’s) Overnight Policy Rate (OPR) cut to 2.75 per cent from 3.0 per cent will stimulate the country’s property market, said PropertyGuru Malaysia’s country manager Sheldon Fernandez.

He said although the OPR rate cut has minimal impact on home loan rates, it is still a silver lining for industry players which was largely overlooked by Budget 2020.

"However, the timing of the (OPR) revision comes as a surprise, with many analysts having anticipated a steady OPR of three per cent through January, with some projections extending this to mid-year.

"It is, nevertheless, a boon for Malaysian home seekers stricken by housing affordability, availability and financing challenges, as a step towards a more conducive lending environment,” he said in a statement today.

During a similar rate cut by the central bank in May last year, the market saw a 13 per cent jump in loan approvals, he said, adding that yesterday’s decision by the BNM might lift sentiments among potential purchaser.

The latest OPR cut according to Fernandez, was set against the backdrop of overpriced properties, prevalent loan rejections which had resulted in the residential overhang in the property sector.

The situation he added, had dashed aspirations by the younger generation to own a house, forcing the government to place an emphasis on affordable housing.

PropertyGuru Malaysia he said, has discovered that about 63 per cent Malaysians felt the government was not doing enough to make houses in the country affordable.

"However, 30 per cent shared that they have yet to apply for affordable housing schemes and three per cent even reported that they did not know such schemes existed,” Fernandez added.

According to the National Property Information Centre (NAPIC), residential overhang stood at 31,092 units as of third quarter 2019 which represented the number of unsold units nine months after it was launched.

A recent survey on consumer sentiments by PropertyGuru showed that concerns about pricing and affordability as among factors behind the slow uptake of these units.

The survey also found that many home seekers have not applied or might not even be aware of the numerous housing schemes and financing initiatives designed to help these demographics purchase homes. — Bernama