Property bubble unlikely to occur: Mah Sing

A property bubble is not likely to occur following Bank Negara Malaysia's move to increase the loan-to-value (LTV) ratio to 70 per cent for third house financing facilities and onwards, says Mah Sing Group Bhd.

Group managing director cum group chief executive Tan Sri Leong Hoy Kum said the move should not affect the overall sentiment of the property market significantly which comprised mainly first time buyers and upgraders.

"As long as developers offer quality properties with good concepts in prime locations, there should still be takers due to the strong employment market, low interest environment and good liquidity in the financial system," he said in a statement today.

Meanwhile, the Association of Banks in Malaysia viewed the move as timely and pre-emptive in nature.

Its president cum chief executive officer Datuk Seri Abdul Wahid Omar said while the banking sector supported house ownerships, the association agreed that the appropriate measure should be adopted to avert unhealthy speculative activities which could lead to a property bubble.

Bank Negara Malaysia today announced the implementation of a maximum LTV ratio of 70 per cent, applicable to third house financing taken out by a borrower, which is effective immediately.

The measure aimed to support a stable and sustainable property market and promote the continued affordability of houses for the general public.

By Bernama