Although Thursday’s rise in the benchmark interest rate was the first in almost four years, industry players do not expect property sales to be affected.
According to ECM Libra property analyst Bernard Ching, despite the interest rate hike, bank financing will continue to be cheap with effective interest rates at 3.8% to 4% from the previous highs of 6.5% to 6.75% about two-and-a half to three years ago.
“Going forward, we expect the OPR to rise gradually and the best thing to do is to lock in the current negative spread before the rates rise further,” Ching told StarBiz.
He said the housing packages being offered by developers were providing a low entry cost for housebuyers and fuelling demand for houses.
He expects these packages to continue for the next couple of months at least, as it would be premature to end them at this juncture.
Ching said upper-middle range buyers, who have the capability to service their loans, were mostly buying for investment purposes.
»We see it as a normalisation of rates, given the improved economic outlook this year« TAN SRI LIEW KEE SIN
SP Setia Bhd president and chief executive officer Tan Sri Liew Kee Sin said the rise in the OPR was very minimal and that “we see it as a normalisation of rates, given the improved economic outlook this year.”
“Generally, interest rates are still low and remain attractive to house buyers. We do not see this affecting our property sales and are confident with our ongoing launches. We will continue with what we have planned for this year,” he added.
Mah Sing Group Bhd group managing director-cum-chief executive Tan Sri Leong Hoy Kum said with the rates still far below historical highs, the affordability level of property buyers was still high.
“We doubt that the rate hike will have any impact on property sales. This increase should be seen as a positive move as it indicates a normalisation which can curb inflationary pressures,” he said.
Leong said the expected economic expansion, improvement in employment market, high savings and healthy affordability levels would contribute to higher demand for properties in the coming months.
Mah Sing will be capitalising on its branding, product quality, location, concept and track record to capture its market share and achieve its 2010 sales target of RM1bil.
The company plans to have property launches in 10 new projects and four existing developments.
By The Star (by Angie Ng)
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