PETALING JAYA: Households applied for less money to buy houses in February with applications falling to RM10.26bil in February from RM12.56bil in January, but the amount applied for was 23% higher than in February 2010.

For the fourth consecutive month, ever since new loan-to-value (LTV) rules for the third or more house was enforced in November last year, households have applied for less money to buy residential property, data from Bank Negara’s monthly statistical bulletin showed.

Analysts have said that the decline in the first couple of months might be seasonal and believe data from March onwards would accurately display the effect from the LTV rule.

In a statement, Bank Negara said that interbank rates were stable in February.

In terms of retail rates, the average base lending rate (BLR) of commercial banks was unchanged at 6.27% as at the end of the month. Retail deposit rates were also stable.

It said broad money (M3) expanded at a more moderate annual rate of 7.9% in February.

“During the month, the expansionary effects of higher credit extension by the banking system to the private sector and net foreign inflows were offset by the fund raising activities of the Government,” it said in the statement.

Meanwhile, narrow money (M1) also expanded at a more moderate pace in February due to the return of currency to the banking system after the Chinese New Year festivities.

Net financing to the private sector increased by RM13.4bil in February on a month-on-month basis, driven by higher PDS issuances.

“PDS issuances rose due to several large issuances mainly for refinancing and working capital,” said the central bank.

“Loans outstanding and other major loan indicators, however, moderated compared with the previous month as there were fewer working days due to the Chinese New Year holidays.”

SOURCE: The Star