Stiff competition in home-loan market

Penang -COMPETITION is heating up in the housing loan business with banks offering attractive financing packages that give borrowers more savings and flexibility.


Citibank Bhd mortgage business head Goh Ching Chee noted that competition had become more intense and this benefited house buyers.

“Consumers today are very financially savvy. They don't just look at interest rates. To help them manage their finances, they look at the total loan package such as margin of financing, service delivery and product flexibility,” he said.

Goh said more consumers were using their home loans as part of their long-term financial planning tool, using the lower cost housing loan financing to pay off higher interest debts, thus making it a smart financial management tool.

A banking analyst concurred.

“It is a buyer's market now. There are currently so many property loans available in the market that consumers are spoilt for choice. Banks will have to work much harder to come up with attractive financing packages to attract consumers,” he said.


Despite increasing competition, industry players are generally positive about the mortgage business this year.


Public Bank Bhd senior general manager Datuk Chang Kat Kiam expects the housing loan market to continue to be competitive with more banks focused on consumer lending.

“However, we are confident that we will continue to secure a good market share. The bank's housing loan growth was in excess of 20% last year and we expect out growth this year to remain strong,” he said.

Standard Chartered Bank Malaysia Bhd country head (consumer banking) Shyam Srinivasan sees 2006 to be another growth year for mortgages.

“The general outlook for the property sector this year is that it will be on an upward trend due to stronger economic growth, improving market sentiment, easy end-financing coupled with improved accessibility and shopping facilities,” he said, adding that these factors would help increase demand and cause a rise in property values in new and existing housing schemes, particularly in key growth areas.
Source : The Star 27/3/2006 Close Window