KUALA LUMPUR (March 24): Housing loan growth in Malaysia slowed year-on-year (y-o-y) to 6.9% in 2024, with owner-occupiers making up the bulk of growth, according to Bank Negara Malaysia (BNM).

Overall outstanding housing loans grew by 6.9% year-on-year (y-o-y) in 2024 as compared to 7.3% in 2023, according to the central bank’s Financial Stability Review — Second Half 2024 released on Monday.

As at end-June 2024, the figure was higher at 7.5%.

Of the 6.9% annual growth registered at end-December 2024, owner-occupiers — individuals with one housing loan, including first-time home buyers — contributed 5.2 percentage points to the annual growth.

“Signs of credit-fuelled investment activity were limited, as the contribution to housing loan growth from borrowers with three or more housing loans remained small (December 2024: 0.03 percentage points; June 2024: -0.01 percentage points)," BNM said.

Looking at the quality of the outstanding housing loans, BNM said they were largely performing across all borrower types with the overall impairment ratio remaining low at 1.2%.

“Of note, individual property investors were observed to exhibit low impairment ratios (0.9%), even when compared to owner-occupiers (1.3%). This appears consistent with the profile of investors, 80% of whom earn more than RM5,000 monthly," it also noted.

Meanwhile, BNM said the median loan-to-value (LTV) ratio of overall outstanding housing loans remained prudent at 69.7%, providing adequate cushioning against possible house price correction.

“With current stable economic conditions, risks of a severe price correction remain unlikely. Downside risks to financial stability emanating from the property market are assessed to remain low in the near term, underpinned by sound lending standards,” it added.

Click here to read more stories on BNM Annual Report 2024.