PETALING JAYA: Analysts are positive on the prospects of the property sector, which will benefit from Budget 2024’s latest policies and incentives.
For MIDF Research, the property sector is expected to benefit from easing conditions for Malaysia My Second Home (MM2H) applications, the RM10bil allocation to expand the Skim Jaminan Kredit Perumahan and the infrastructure projects, the light rail transit three (LRT 3) and Penang LRT, which will support demand for property in the Klang Valley and Penang.
Nevertheless, the announcement of a 4% flat rate stamp duty on the memorandum of transfer (MOT) by non-citizens and foreign-owned companies may negatively affect buying interest by foreigners marginally, it said in its latest report yesterday.
“Overall, we see the property sector to be net positive from the Budget 2024 announcement, as the positives of the easing of the MM2H and new infrastructure projects should offset the slight negative of the stamp duty on the MOT for foreigners,” added the research house.
MIDF Research said, “We expect demand for property to continue to recover amid expectations that the overnight policy rate will remain unchanged for the rest of this year.
“Besides, the improving property overhang in Malaysia further bodes well for the near-term outlook for the sector.”
The research house’s top “buy” picks for the sector are Mah Sing Group Bhd
with a target price (TP) of RM1.01 and Matrix Concepts Holdings Bhd at a TP of RM1.86.
“We remain sanguine on property developers that focus on mid-market and affordable segments, amid resilient demand for affordable homes,” noted the research house.
MIDF Research also pointed out the healthy uptrend in loan applications.
According to data released by Bank Negara, loan applications for the purchase of property were higher at RM54.4bil, up 4.9% month-on-month (m-o-m) in August after recording an increase of 2.7% m-o-m in July.
Cumulatively, total loan applications in the first eight months of the year were marginally higher at RM403bil, up 1% year-on-year which signal marginally stronger buying interest on properties.
Similarly, total loans approved for the purchase of property climbed 7% m-o-m to RM24.8bil in August, reversing a decline of 3.7% m-o-m in July.
The higher total approved loans bode well for new property sales outlook for property developers, said MIDF Research.
Meanwhile, RHB Research is upbeat that the MM2H requirements will be relaxed, as the Budget 2024 announcement last Friday.
Previously, it was reported that the stricter guidelines resulted in a 90% plunge in MM2H applications.
“Hence, with these easier requirements, Penang Island, Kuala Lumpur’s KLCC and Mont’ Kiara areas, as well as the Iskandar Malaysia region should benefit, as these are typically the favourite spots among foreign property buyers,” said RHB Research in its property report yesterday.
The brokerage firm expects UEM Sunrise Bhd, Sunway Bhd and Eastern & Oriental Bhd to be the prime beneficiaries of the latest measures.
Given the burgeoning electrical and electronics sector, the government’s plan to open a high-tech industrial area in Kerian, Perak should also encourage the growth of the housing market in the vicinity, it added.
Developers such as Eco World Development Group Bhd and Tambun Indah Land Bhd have projects, namely, Eco Horizon and Pearl City in the south of Seberang Perai.
“Over the next one to two years, we expect some developers to explore land banking opportunities in the surrounding areas,” noted RHB Research.
In addition, the brokerage firm is still confident in the Iskandar Malaysia property market.
It was recently reported that the number of travellers using the Malaysia-Singapore land route via the two land border entrances, such as the Causeway and Malaysia-Singapore Second Link are expected to increase at a rate of 15% per annum.
“We expect the upcoming announcements on the Johor-Singapore special economic zone to further drive interest in Johor-related property stocks, as the rising cross-border traffic and the influx of foreign direct investment will be key drivers,” it added.
RHB Research said AME Elite Consortium Bhd is the key industrial player in Iskandar Malaysia.
Therefore, property sales for the remainder of 2023 and going into 2024 will be driven by pent-up demand post-pandemic, positive spillover from the increasing demand for industrial properties, which suggests an uptrend in new private investments and infrastructure developments, which include the Rapid Transit System, and potentially Mass Rapid Transit and high-speed rail.
