According to data released by Bank Negara Malaysia, the total loan applied for the purchase of property increased to RM53.4b in August 2022 after a decline of -12.5% in July 2022. Loan application data remains stable in August 2022, indicating demand for property was unfazed by the OPR hike as demand was supported by the reopening of the economy.
On yearly basis, loan applications for the purchase of property in August 2022 surged by +66.1%yoy due to a low base in August 2021 which was dragged by the lockdown in Malaysia.
According to MIDF, the total loan approved for the purchase of property increased marginally to RM23.3b in August 2022, reversing the decline of -9%mom in July 2022. The uptick in loan approval was mainly due to higher property loan applications in August. That cushioned the lower percentage of total approved loans over the total applied loans of 43.6% in August 2022 against 44.5% in July 2022. On yearly basis, the total loan approved for the purchase of property in August 2022 surged by +93%yoy, attributed to a low base in August 2021 and an improved percentage of total approved loan over the total applied loan of 43.6% in August 2022 against 37.5% in August 2021.
Overall, the higher approved loan is in line with our expectation of marginal recovery in new property sales for property developers.
Residential overhang units eased in 2QCY22. According to data released by National Property Information Centre
(NAPIC), residential overhang units eased to 34,092 units in 2QCY22 from 35,592 units in 1QCY22. The decline in residential
overhang units in 2QCY22 could be attributed to the reopening of the economy. Note that residential overhang units increased to above 35k units in 4QCY21 due to disruption to economic activity from several lockdowns in Malaysia. Johor has the highest number of residential overhang units 6,040, followed by Penang (5,508 units), and Selangor (5,156 units).
While MIDF says it sees residential overhang is showing signs of easing, the property market may still partly drag by the lingering high overhang issues as residential overhang units remain high in 2QCY22, staying above 30,000 units.
