Malaysia’s Mortgage Loan Applications Hold Steady, Approvals Rise in 2023

Cumulative mortgage loan applications for the first nine months of 2023 (9M 2023) in Malaysia reached RM337 billion. This figure reflects a modest 3.2 percent decline compared to the previous year (YoY). However, it’s important to note that it still surpasses pre-pandemic levels.

In the third quarter of 2023 (3Q 2023), mortgage loan applications saw a notable increase, rising by 1.3 percent quarter-on-quarter (QoQ). This uptick was mainly driven by strong numbers in July and August. Nevertheless, September 2023 witnessed a significant decrease of 11.4 percent month-on-month (MoM) and remained almost unchanged year-on-year (YoY) with a marginal decline of 0.1 percent, according to reports from UOB Kay Hian.

While loan application figures displayed some volatility, the approvals for mortgage loans remained resilient throughout the year and are expected to remain stable for the remainder of 2023.

In 9M 2023, approved mortgage loans reached RM144 billion, marking a 1.7 percent YoY increase despite the decrease in mortgage applications. This positive trend boosted the approval rate to 43 percent, up from 41 percent during the same period the previous year.

However, in the residential property sector, total approved loans in 3Q 2023 remained relatively flat, showing only a minor 0.65 percent increase compared to the previous quarter, as reported by UOB Kay Hian.

September 2023 recorded a more significant decline in total approved loans, with a 14.5 percent MoM decrease. This drop was attributed to weaker loan applications, which were influenced by a surprise rate hike in July 2023. The impact of the rate hike became evident one to two months after its implementation, according to analysts.

In summary, Malaysia’s mortgage loan market has shown resilience and gradual growth despite challenges, with approvals for mortgage loans outpacing the decline in applications. However, some fluctuations were observed, particularly following the rate hike, suggesting the need for continued monitoring of market dynamics.

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