Call for banks to continue giving loans

Banks and financial institutions should not be too strict and rigid in approving housing loans to eligible borrowers during this global financial crisis.

Real Estate and Housing Developers Association (Rehda) Johor branch immediate past chairman Steven Shum said they should not use the situation in Europe and the US as an excuse.

“We believe banks are cautious now but they should not tighten for the sake of tightening,” he told StarBiz.

Shum said banks in the country should not use the subprime crisis or credit crunch in the US as an excuse not to dispose loans to deserving consumers in Malaysia.

He said although giving out loans was the prerogative of the banks, sometimes it required judgment, confidence and trust on their side.

Shum said if the businesses were viable or the persons applying for the loans had long-term employment and able to serve their loans, banks should not be reluctant to lend them the money.

“At the same time, banks also should look at ways to assist existing borrowers to either refinance their loans or extend their payment period.

“It should be a win-win situation for both the banks and borrowers and the Government must step in to ensure that both parties are well protected,” said Shum.

Developers were likely to consolidate during this time and would look at better construction methods to reduce cost, he said, adding that more were expected to adopt the pre-fabricated method as the costs of labour and raw materials were escalating.

“The pre-fabricated method seems to be a better choice because fewer defects occur during construction, as the pieces are manufactured at the factories compared with the in-situ methods.”

Beginning next year, most developers would go for small launches, said Shum.

Rehda Johor will be organising the Malaysia Property Expo 2008 at the Podium Area, Johor Baru City Square shopping complex, from Oct 30 to Nov 2.

Although the economic outlook was not good, 34 developers taking part in the event were still optimistic that they would be able to generate RM60mil in sales, he said.

He added that they were committed to serve and deliver their products during good or bad times and buyers should use the event to do market research.

Source: The Star Online
Date: 23/10/2008