UOB sees growth in home loans market

The UOB booth at the Forum

The Malaysian property market has been on an upward trend and is still doing well despite concerns about the effects of the US subprime crisis and a slowdown in the global economy. This augurs well for the home loans market as well, says United Overseas Bank (M) Bhd's (UOB) first vice-president for mortgage, Loo Yeok Bee.

Take-up rates have risen by more than 50% within three months of launch, especially for high-end properties, she adds. According to Bank Negara Malaysia, loan approvals for 1Q2008 stood at RM13.6 billion, while for 1Q2007 it was RM8.5 billion.

UOB currently holds more than 6% of the home loans market in Malaysia. "We hope to increase our share to 7% by 2009," Loo says.

UOB is confident of the property market, and will continue to be, so as long as there is demand.

According to the Valuations and Property Services Department, over RM77 billion worth of properties were transacted in 2007, of which almost 65% comprised residential properties. Sales increased to 45% in 2007, with 52,664 units launched, compared with 41% in 2006.

"Currently, high-end properties in choice locations, such as the Klang Valley, Johor and Penang, are better re-ceived than low-end ones," says Loo.

Is it easier to approve home loans now than before?

Loo says it is relatively easier now than three or four years ago, as banks have access to better and more efficient technology and secured assessment systems to process loan applications. This encourages faster approvals and turnaround time for customers. Currently, it takes three working days for a home loan to be approved and for a letter of offer to be issued.

The bank looks out for five main considerations when approving loans — credit rating, capability, commitment, collateral and the applicants' character.

On whether banks prefer to give out loans for new properties or secondary market properties, she says both contribute substantially to their growth.

There are many home loan packages that cater for the different needs of customers and all offer competitive interest rates.

"We are proud of our flexible home loan facility. Customers can choose from a variety of facilities to match their financial needs. It is important for us to deliver quality service and we are supported by a large branch network and competent sales team," says Loo.

Current UOB home loan packages include the Flexi Mortgage Home Loan, the Intelligent Home Loan as well as the International Home Loan for its foreign customers. "At UOB, we offer a home loan facility of up to 40 years or until the borrower reaches 70 — giving customers flexibility in deciding their loan tenure and possibly lower instalments. UOB also offers up to 90% margin of financing plus 5% for mortgage reducing term assurance. These are our special features as we cater for our customers' financial needs at different stages of their life," says Loo, adding that the average loan tenure for high-end properties is around 15 to 20 years, with an average margin of financing of 80%.

The Edge Investment Forum on Real Estate 2008, which was held on May 10, was organised by The Edge and presented by UOB.

By The EDGE Malaysia - City & Country (by Rosalynn Poh)