The housing finance system in Malaysia comprise of a diversified range of institutions to serve various needs of the domestic economy. In view of this, we believe among the important factors that contribute to the establishment of the sustainable housing finance system in Malaysia are a calibration of government participation, active and efficient mortgage market and also the development of secondary mortgage market.

Since the 1970s, the Malaysian Government has been actively promoting widespread ownership of housing, especially among the lower- and middle-income groups. The main objective of the Government’s housing policy is to increase accessibility to adequate, affordable and quality houses for all income groups, while priority is given to the development of low and medium-cost houses. On the financial front, Bank Negara Malaysia (BNM) (the Central Bank of Malaysia), has also recognized that the prerequisites of successful home ownership programmes are housing finance availability and accessibility. This is evident by the outstanding amount of housing loans granted by housing credit institutions (comprising of the commercial banks (including Islamic banks), the Treasury Housing Loans Division, Bank Kerjasama Rakyat Malaysia Berhad (a cooperative bank), Malaysia Building Society Berhad, Borneo Housing Mortgage Finance Berhad and Sabah Credit Corporation which totaled RM299 billion/USD90.56 billion 1or 31% of GDP as at the end of 2012.