ECM Libra Research, part of the ECM Libra Financial Group, expects less property loans to be sought by cautious investors, in fear of growing global economic stability and looming policy tightening.

It said in a research note that it doesn’t expect Bank Negara Malaysia (BNM) to change the rate of its overnight policy rate (OPR), currently at 3 per cent but its possible that BNM will hike the Statutory Reserve Requirement (SRR) further in the near future.

The research note added that they expect BNM to impose some additional measures to macro-prudential lending, in order to ease some inflationary pressure and to curb the current loan growth momentum.

Furthermore, the research note said that the government’s implementation of affordable housing scheme is interfering with speculative demand in the housing market.

The lending indicators data for August showed that the month-on-month growth rate of loan applications had dropped by 6.7 per cent to RM60.4bn (US$18.8bn), compared to RM65.3bn (US$20bn) in July.

ECM Libra Research said property loans accounted for 40.7 per cent of the year-to-date credit expansion, followed by working capital loans at 22.9 per cent, although it prognoses that business loans will climb n the long term due to the anticipated slowdown in property loans.