KUALA LUMPUR: LBS Bina Group Bhd supports the government’s proposal to lower the housing loan interest rate for the benefit of home buyers, particularly first time buyers.
“We welcome with the DPM to bring this issue up to Bank Negara Malaysia (BNM) as it is good for property developers.
“The government does not want home buyers to be burdened by high housing loan interest rate,” group managing director Tan Sri Lim Hock San said after the company's extraordinary general meeting, here today.
Yesterday, BNM raised the key overnight policy rate (OPR) by 25 basis points to 3.25 per cent, the first interest rate hike in three and half years.
It was reported Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, after consulting Bank Negara, will propose for Cabinet approval that mortage repayment rate be lowered from the current 4.65 per cent.
Lim said LBS foresee minimal impact on its property launches this year, following the central bank raising the OPR.
“The increase in interest rate was supported by the background of strong economy, and the overall income will increase. Therefore, able to absorb higher cost. The OPR does not have direct significant impact on housing developers,” he said.
Lim indicated the increase in interest rate reflects the country’s strong economy and it will boost the fund managers’ confidence, which in turn would strengthen further the local note.
“It is good sign as foreign funds will come in. Developed countries like US, when they increase their interest rate, their shares on the stock market tend to go up,” he said.
“When the economy grows, more people would be able to buy a house. The increase in interest rate could help the country's economy. I'm sure many foreign funds will come in,” he said.
Earlier, LBS had announced a RM1.8 billion sales target, banking on its RM2.2 billion gross development value (GDV) for the new property projects this year.
“We have three 1Malaysia Civil Servants Housing Project (PPA1M) developments in Bukit Jalil, Batu Pahat, Johor and LBS Alam Perdana, Selangor with a total of RM586 million GDV.
“We also have Rumah Selangorku project comprising 1,312 units with a GDV of RM236 million. All of these four projects have a total of RM822 million,” he said.
“We also have new projects like LBS Alam Perdana as we secured over RM342 million in sales for the phase one, comprising terrace-link and town houses with a combined 1,653 units,” he said.
Lim added LBS expects to launch the phase two of LBS Alam Perdana comprising 853 units double-storey link-house and 24 units of semi-detached houses in April this year.
"The project is all landed type. LBS Alam Perdana would be one of the catalysts to achieve our sales target this year. We also hope to launch the LBS CyberSouth township in Dengkil by fourth-quarter this year, mainly on link-house variant,” he said.
During the EGM, the shareholders approved the proposed share split into two and bonus issue of one unit for every 10 shares.
LBS share price dropped 1 sen to close at RM2.44, with 573,200 shares changing hands, today.