MIDF notes that there was a positive growth in loan application with Bank Negara report showing an increase for the seventh consecutive months in November 2023, growing at +13.9%yoy to RM48.5b. The continuous growth in loan application indicates that buying interest on property remains healthy. Cumulatively, loan application for purchase of property in 11MCY23 was higher at RM560.6b (+5.2%yoy), indicating steady recovery in demand for property. Going forward, the house sees that demand for property to remain strong in CY24 as buying interest should be supported by the improving outlook for property sector.
Approved loan for purchase of property was higher at RM20.6b (+13.5%yoy) in November 2023. The stronger approved loan was mainly due to higher loan application while percentage of total approved loan over total applied loan was flattish at 42.3%. Total approved loan grew for seventh consecutive months in November 2023, bringing cumulative 11MCY23 total approved loan higher at RM245b (+8.7%yoy). The stronger approved loan indicates the improving new sales of property developers which will support earnings growth.
KL Property Index ended CY23 on a positive note, chalking stellar gains of +34.5%. The good performance of KL Property Index was on the back of improving residential overhang in Malaysia which fell for seventh consecutive quarters in 3QCY23, positive sentiment on upcoming infrastructure project such as RTS which links Johor Bahru and Singapore and pause in OPR hike since July 2023 which continue to underpin recovery of demand for property. The top five performers of KL Property Index in CY23 were Ewein Berhad, UEM Sunrise Berhad, Iskandar Waterfront City Berhad, Avaland Berhad and Crescendo Corporation Berhad.
Revised MMH2
Tourism, Arts, and Culture (Motac) Minister Datuk Seri Tiong King Sing had on 15 December 2023 announced the relaxation of the Malaysia My Second Home (MM2H) programme. The programme is now divided into three categories: Platinum, Gold, and Silver, each with its own set of requirements. The relaxation of MM2H requirement is expected to be positive to the sector as it should increase more applicants and increase demand for property in Malaysia. Recall that MM2H application requirement was revised in 2021 and the requirements were more stringent as applicants are required to show (i) offshore monthly income of RM40k (from RM10k previously), (ii) liquid asset amounting to RM1.5m in order to apply for visa and (iii) must place a fixed deposit of RM1m in a bank account in Malaysia.
With the latest revision in MM2H, the minimum age requirement has been lowered to 30 years from 35 years while financial
prerequisites are less stringent. We think that property in states that favored by foreigners such as Johor, KL and Penang
should see better demand for property by foreigners going forward.
Maintain POSITIVE on property sector. MIDF said narrow RNAV discount for property companies under coverage in view of
the improving landscape of the sector and revised target prices for property companies under its coverage. MIDF downgrades Eco World Development Group to NEUTRAL from BUY due to limited upside. The house remains POSITIVE
on property sector as it thinks that fundamental of property sector is improving with lower residential overhang which eased
concern on residential oversupply. Besides, the expectation of unchanged OPR should continue to support demand for
property.
Top picks include Mah Sing Group and Matrix Concepts.
