BSP ratifies K302mil home loans

By CLARISSA MOI
THE Bank South Pacific (BSP) has approved out loans with a total value of K302 million under its First Home Ownership Scheme (Fhos) loan facility.
BSP Financial Group Ltd chief executive Robin Fleming told The National that BSP’s first home ownership loans continued to be very popular with customers.
Fleming said the bank had financially assisted more than 1,000 Papua New Guineans for their first home under the product.
“The fixed interest rate of 4 per cent and terms of up to 40 years mean that the cost of borrowing has not changed for existing and potential borrowers,” Fleming said.
“And a first home remains one of the most important financial objectives for many customers.
“The total value of loans under the facility is now K302mil and this continues to increase.
“While there is a surplus supply of investment properties, which has been accompanied by lower rentals in certain market segments, the underlying demand for home ownership has not changed.
“Customers remain interested in new homes in the K450,000 range which is the target marker for our first home ownership facility.”
The BSP first home loan scheme is a joint initiative with the Government which began in 2014. But he said the Government’s liquidity support for the facility “did not eventuate years ago”.
“BSP decided to continue to offer this important product to customers using its own balance sheet and renamed the facility the first home ownership scheme.”
Fleming said the property investment sector had seen rental rates reduced as a result of over-supply and demand having tapered off.
“And anyone looking to enter the property investment market will need to have access to cash flow other than the investment property itself to meet loan repayments,” he said.
“And (they) will also have to be flexible on rental rates, as well as have the cash reserves to allow for longer periods of the property not being rented.”