MIDF Research maintains positive outlook on property sector

KUALA LUMPUR — MIDF Research has maintained a positive outlook on the property sector as it sees the landscape for the sector is improving, underpinned by a stable House Price Index (HPI) outlook, an unchanged overnight policy rate at 3.0 per cent, and a noticeable reduction in residential overhang.

Additionally, the upcoming infrastructure projects such as the Johor Bahru-Singapore Rapid Transit System (RTS) Link and Penang Light Rail Transit (LRT) will further improve connectivity and support buying sentiments on property in Malaysia, the research firm said.

According to the National Property Information Centre, Malaysia’s HPI has been on an upward trajectory since 2022, following the reopening of the economy.

The HPI has been on a growth trajectory since the fourth quarter of 2021 (4Q 2021), experiencing a robust recovery throughout 2022, driven by improvements in the Malaysian property market.

In 3Q 2023, the HPI stood at 219.4, marking a notable increase from 216.8 recorded in 2Q 2023 and 218.0 in 3Q 2022.

Meanwhile, the research firm opined that the rising construction cost and inflationary pressure may drive property prices marginally higher as developers pass on higher costs to homebuyers.

At the same time, it noted that loan applications declined on a yearly basis for the first time in eight months as demand for property took a breather.

According to Bank Negara Malaysia, the total loan application for the purchase of the property declined by 21 per cent month-on-month in February 2024 to RM40.1 billion due to the short month.

On a yearly basis, loan applications in February 2024 were lower by 19 per cent year-on-year (y-o-y) after a strong growth of 46 per cent y-o-y in January 2024.

“Nevertheless, total loan applications in the first two months of 2024 was higher by 8.0 per cent y-o-y to RM91 billion, which indicates stronger demand for property,” it added. — BERNAMA / pic TMR FILE