KUALA LUMPUR: Recent loan application data released by Bank Negara showed a drop off in loan applications for property purchases in February, on the heels of a robust increase in January.
February figures showed total loan applications came in 19% lower y-o-y at RM40.1bil as prospective property purchasers took a breather after a 46% jump in applications in the previous month.
However, the cumulative loan applications in the first two months of 2024 was 8% higher over the same period in 2023 at RM91bil, which indicates the continuation of a positive trend.
Looking at the approved loans for the purchase of property in February, the number of approvals was only 6% lower y-o-y at RM17.4bil, despite the steep 19% drop in loan applications.
This was owing to 43% of the total applied loans being approved in February, as compared to 38% in the same month in 2023.
Over the first two months of 2024, the total approved loans stood at RM37.8bil, which marked a 14.2% y-o-y jump over the previous-year period,
MIDF Research, which reiterated its positive outlook on the Malaysian property sector, said this underpins expectations of higher property sales.
"We expect buying interest on property to grow stronger in 2024 as the sector outlook remains positive," it said in a sector update.
According to the research firm, data from the National Property Information Centre's (Napic) House Price Index shows that property prices have been trending higher since 4Q21, with a strong recovery posted in 2022, following the reopening of the economy.
Also contributing to the increase in prices, the research firm said there will be marginal price impact from rising construction costs and inflationary pressure.
"We remain positive on the property sector as we see that landscape for the property sector is improving with stable House Price Index outlook, unchanged OPR at 3%, and improving residential overhang," said MIDF.
It added that upcoming infrastructure projects such as Johor Bahru-Singapore Rapid Transit System (RTS) Link and Penang LRT will further improve connectivity and support buying sentiment in property in Malaysia.
The research firm's top picks are Mah Sing Group (buy, RM1.42) and Matrix Concepts (buy, RM1.91).
"We like Mah Sing due to its exposure to affordable residential segment and growing presence in industrial properties segment.
"Besides, its growing property presence in Johor will further support growth of its property sales."
MIDF added that it favours Matrix Concepts for its stable outlook, which is driven by its Sendayan township in Seremban that focused on affordable landed home.
"Besides, its landbank expansion in Labu will further support growth of its property development business. Dividend yield of Matrix Concepts is attractive at 5.4%."
