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The recent decision by Bank Negara Malaysia (BNM) to raise the Overnight Policy Rate (OPR) by 25 basis points to 2.00 percent will have no negative impact on the housing market in 2022 and 2023.

Kashif Ansari, co-founder and CEO of the Juwai IQI group, said BNM has taken care to maintain the country’s economy even through the worst of the pandemic.

Other nations were experiencing very high inflation as a result of the global commodity price surge, Kashif explained, but Malaysians were spared since the government provided fuel subsidies.

He stated that from 2004 and 2020, Malaysia’s OPR only dropped as low as 2.0 percent in eight quarters, making the last two years the first time the rate was as low as 1.75 percent in history.

He explained that rather than posing a threat to the housing market, the hike in the OPR to 2.0 percent reflected the economy’s recovery and BNM’s belief that the economy no longer required the extra support of ultra-low interest rates.

“We expect the home market will respond positively to the expanding economy, household income, and employment this year and in 2023.” This year, the gross domestic product is predicted to increase by up to 6.3 percent. The bank forecasts increased domestic demand and exports.

“As a result, we expect good economic conditions to support strength in the real estate market in the second half of this year and into 2023,” he added.

 

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KUALA LUMPUR (May 19): Bank Negara Malaysia’s (BNM) decision to lift the Overnight Policy Rate (OPR) by 25 basis points to 2.00% recently will not negatively affect the housing market in 2022 and 2023.

Juwai IQI group co-founder and chief executive officer Kashif Ansari said BNM has taken a careful step in supporting the nation’s economy even during the worst of the pandemic.

“Inflation is on a rampage in many parts of the world, but it is not on a rampage in Malaysia with headline inflation will likely be somewhere between 2.2% and 3.2% this year.

“That is a manageable rate. There is still room for employment and business activity to grow significantly without causing inflation to surge,” he said in a statement on Wednesday (May 18).

Kashif shared that other countries were experiencing very high inflation due to the spike in global commodity prices, while Malaysian were spared as the government was providing fuel subsidies.

In the wake of the global financial crisis between 2004 and 2020, he noted that Malaysia’s OPR only dropped as low as 2.0% during eight quarters, hence, the past two years represented the first time in history that the rate was as low as 1.75%.

He said rather than creating a risk for the housing market, the increase in the OPR to 2.0% was a reflection of the economic rebound, reflecting BNM’s view that the economy no longer needed the extra support of ultra-low interest rates.

“We believe the housing market will react positively this year and in 2023 to the growing economy, household income, and employment. With the gross domestic product expected to climb as much as 6.3% this year. The bank is projecting stronger domestic demand and higher exports.

“Therefore, we expect positive economic conditions to drive strength in the real estate market that will really gather pace in the second half of this year and in 2023,” he added.

Source: Edge Prop

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