According to data released by Bank Negara Malaysia (BNM), loan applications for the purchase of property remained healthy by growing at +0.9%mom in September 2023 after growth of +4.8%mom in August 2023. On a yearly basis, loan applications in September surged by 15.6%yoy, bringing cumulative loan applications higher at RM457.9b in 9M2023 as buying interest on properties remained healthy post-reopening of the economy and country borders. Looking ahead, MIDF says it expects loan applications to remain in positive growth territory as BNM maintained OPR at 3% in Nov 2023.
Higher approved loan in 9MCY23. In contrast to the higher loan application in September 2023, the total loans approved for the purchase of property eased by -13%mom. The decline was mainly due to a lower percentage of total approved loans over total applied loans of 39.8% in September 2023 against 46.1% in August 2023. Nevertheless, the total approved loans grew on a yearly basis by +5%yoy in September, recording the fifth consecutive growth since May 2023. That brought the cumulative approved loan in 9MCY23 to RM200.7b (+7.6%yoy) which signals a better overall net sales outlook for the property sector.
The property sector may benefit from potential new infrastructure projects. According to a news report, Perak infrastructure, energy, water, and public transportation committee chairman Datuk Seri Mohammad Nizar Jamaluddin revealed that the Ipoh-KL high-speed rail (HSR) is being reviewed. The project, if implemented, would be Malaysia’s first HSR route in the country and would cut travel time between KL to Ipoh to 40 minutes. The proposal will need to secure approval from the transport ministry as well as consent from the Selangor government before conducting a feasibility study.
The house sees that the potential new infrastructure project would benefit the property sector in Malaysia as it improves connectivity between the two states. MIDF thinks that if Ipoh-KL HSR is implemented, that will improve demand for property in Ipoh and benefit property developers that have exposure in Ipoh. In this context, the house thinks Sunway Berhad may benefit as its Sunway City Ipoh has more than 300 acres of remaining landbank with a remaining GDV of RM3.7b. Besides, Sunway Berhad is targeting to open a new hospital in Ipoh by 2025.
MIDF maintains a POSITIVE on the property sector as it sees a positive outlook for the property sector remains intact. The latest data from BNM shows that demand for property remains healthy while higher approved loans should indicate a better new sales outlook. Besides, the unchanged OPR is positive for the sector as demand for property will remain supported.
Top picks Mah Sing Group, Matrix Concepts.
