Buying Properties in a Low Interest Rate Environment
- wei Long
- Aug 5, 2021
- 2 min read
Bank Negara decided to maintain the Overnight Policy Rate ( OPR ) at all-time low of 1.75% . Before that , the OPR was kept at 3.25% since January 2018 .
But what is OPR and how does it affect the property market in Malaysia?
The overnight policy rate (OPR) is the minimum interest rate charged amongst banks in the interbank market, which they borrow funds from each other.
As a Home buyer , the cost of borrowing will be lessened , the lower the OPR rates will trigger interbank to adjust their base lending rate (BLR) and base financing rate (BFR). This would affect the the interests rates - which means lower costs for borrowing or refinancing an existing home loan .
Why did the Government lower the OPR ?
The reason why Government came to the decision of lowering the OPR due to the wake of the Covid-19 Pandemic has that caused global economic situations to weakened , disrupting economic activities across most countries .
If you are looking to buy a property , now is a good time to buy , with the lower OPR means lower barriers to financing and owning a property . Residential sector will remain a buyer's market moving forward , with further discounts , rebates and promotions from developers . It is no doubt a Buyer's market and those who are buying should take capitalize on the current economic market conditions and seize the opportunity to secure a good buy .
In every kind of crisis , there are good opportunities to select good assets . Property is always a good asset that helps you hedge against inflation . For Homeowners , doing proper research and buy within your affordability range . For Investors , stick to the basics of yields and returns .
Sources
Comments