Property buyers will most likely be undeterred by last week’s rate hike as analysts view the rise in overnight policy rate (OPR) signals the firming up of property prices. Bank Negara Malaysia (BNM) raised its OPR by 25 basis points (bps) to 2.75% last 09/07/2010, Friday after its first rise on last March's Monetary Policy Committee (MPC) meetings.
The central bank said the hike was prompted by the continued global recovery in the second quarter, supported by robust and broad-based growth in most emerging economies, in particular Asia , and a moderate recovery in the advanced economies. The rate hike will be followed by a rise in bank's base lending rates. This would only have a marginal impact on demand sentiment in residential properties. This is because the recent improvement in property sales has been primarily supported by the attractive financing schemes offered by most major developers which, most importantly, included interest-absorption-schemes whereby developers bore all financing costs on behalf of buyers up to vacant possession.
Source: Malaysia Real Estate Agent Website