Financing Performance
Highlights for Q4 2020
  • Outstanding housing loans by the banking system expanded by 7.1% as at end-December 2020 to RM646.8 billion.
  • In 2020, housing loan applications received by banks amounted to RM194.4 billion.
    • In the same period, banks approved RM137.7 billion of house financing or about 307,800 accounts. 43% of these newly approved housing loans were granted to first-time home buyers (2013-2019 average: 41%).
  • The overall housing loan approval rate stood at 72.0%[1] as at end-December 2020 (2013-2019 average: 74.5%).
    • The moderation in approval rate reflects prevailing issues surrounding housing affordability arising from the mismatch between supply and demand of houses.
    • 60% of newly approved housing loan accounts were for the purchase of houses priced below RM500,000 (<RM300,000: 29%; RM300,000 – RM500,000: 31%).
    • By location, 75% of the newly approved housing loans were for the purchase of residential properties in Selangor, Kuala Lumpur, Johor and Penang.
  • Common reasons for banks rejecting housing loan applications:
    • Borrowers are already highly indebted;
    • Borrowers have very little residual income after taking into account monthly living expenditures and existing financial obligations;
    • Borrowers have poor credit history; and
    • Insufficient documentation to support ability to repay loan obligations.
  • Advisory services are available for the general public prior to undertaking home financing, which includes Rumahku Financial Education programme by Agensi Kaunseling & Pengurusan Kredit (AKPK) to help potential borrowers understand the financial commitments associated with purchasing a home.
    • For applicants who have been unsuccessful in securing home financing, Khidmat Nasihat Pembiayaan (MyKNP) by AKPK has been established to help individuals better understand the factors affecting financing applications, as well as help improve eligibility for future financing
  • Available financing assistance packages for home buyers include:
  • More details can be found here: https://www.housingwatch.my/04_financing.htm

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    [1] The approval rate is the ratio of the number of housing loan applications approved to the number of housing loan applications received by the banks. The ratio is derived using the 12-month moving average method, based on monthly data submissions from banks to Bank Negara Malaysia.

     

    A. Outstanding Housing Loans

     

    B. Approved Housing Loans to First-Time Home Buyers
         (Share of total approved housing loan accounts)

     

    C. Composition of housing loan approvals by house price (December 2020)

     

    D. Housing Loans Approval Rate by House Price