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BUSINESS

OPR increase will not negatively affect Malaysia's housing market -- Juwai IQI

18/05/2022 12:02 PM

KUALA LUMPUR, May 18 (Bernama) -- Bank Negara Malaysia’s (BNM) decision to lift the Overnight Policy Rate (OPR) by 25 basis points to 2.00 percent 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 per cent and 3.2 per cent 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 today.

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 per cent during eight quarters, hence, the past two years represented the first time in history that the rate was as low as 1.75 per cent.

He said rather than creating a risk for the housing market, the increase in the OPR to 2.0 per cent 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 per cent 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.

-- BERNAMA


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