MIDF Research said the sharp rebound in housing loans in October is a sign of better sales prospects for developers.
PETALING JAYA: Rising housing-loan approvals and lower inventories indicate the residential property sector is set to see improved sales, more so with the help of policy measures such as the Johor-Singapore Special Economic Zone (SEZ).
MIDF Research said the sharp rebound in housing loans in October is a sign of better sales prospects for developers.
Approved loans for the purchase of properties rebounded to RM24.3bil (up 11.3% month-on-month) in October following a decline of 21.5% month-on-month in September.
That brought the total loans approved in the 10 months of the year to RM237.8bil or 6.9% higher year-on-year.
“The growth in loan application is positive for the sector as it indicates buying interest in property remains resilient,“ the research house said.
“The higher number of approved loans over the past 10 months indicates stronger new sales for property developers in Malaysia,” it added.
The research house noted the number of unsold residential properties was at the lowest level in seven years as it declined to 21,968 units in the third quarter (3Q24) from 22,642 units in 2Q24.
The numbers also declined for serviced apartments over the period. The fall could be attributed to inventory clearing by developers and stronger demand for property.
“We expect the declining number of unsold properties to keep supply of property healthy and support buying sentiment,” MIDF Research said in a sector report.
It added the Johor-Singapore SEZ and Johor Baru–Singapore Rapid Transit System also serve as catalysts for the sector.
With a positive view on the sector, MIDF Research main picks are Mah Sing Group Bhd
and Matrix Concepts Bhd with “buy” calls and target prices of RM2.04 and RM2.48, respectively.
“We like Mah Sing Group as we are positive on its sales outlook, which will be driven by its strategy of selling affordable residential projects,” the research house said. The group’s data centre project also provides upside to earnings growth in the long-term, MIDF Research said.
Meanwhile, Matrix Concepts’ outlook is positive with strong earnings visibility from the Malaysia Vision Valley 2.0 project that covers 2,382 acres and has a gross development value of RM12bil, MIDF Research said.
The company also stands to enjoy growing earnings contributions from its healthcare division, it added.
