This follows Finance Minister Lim Guan Eng’s remark yesterday that his ministry has been in discussions with Bank Negara Malaysia (BNM) on how to facilitate loans for first-time home buyers.

He said he felt that the rules were still strict despite BNM’s assurance that it had “relaxed a bit” under Pakatan Harapan.

In a statement, Institute for Democracy and Economic Affairs senior fellow Carmelo Ferlito said the government should instead focus on the problem of rising household debt which is being driven by home loans.

“With a 76.3% home-ownership rate, Malaysia is scoring pretty well worldwide,” he said.

“On the other hand, BNM has revealed that household debt is 82.2% of the gross domestic product.

“A further easing of credit conditions will harm the financial stability of those who are already in a fragile situation.”

He added that the property market should be allowed to correct itself without government intervention or credit support.

“Developers will have to deal with the consequences of their investment decisions, and consumers will have to make financial choices consistent with their economic conditions to avoid overexposing themselves.”

Property developers previously complained that lending rules in the country were too strict.