FREE MALAYSIA TODAY. 17TH APRIL: The halt in overnight policy rate hikes could be a possible factor, says MIDF Research.
ata from Bank Negara Malaysia (BNM) has indicated that loan applications for the purchase of property have risen by 26.6% month-on-month (m-o-m) in February, reversing five consecutive months of declines.
Meanwhile, loan approvals for the purchase of property also increased 26.6% m-o-m after three consecutive months of declines from November 2022 to January this year.
In a report today, MIDF Research suggested that the sudden rise in the loan applications could be due to a recovery in buying interest following the overnight policy rate (OPR) hike pause in January.
The higher rate of approved loans also signal that the sales outlook of property developers should improve going forward, it added.
“According to data released by the National Property Information Centre, the transaction volume of properties jumped by 29.5% year-on-year (y-o-y) to 389,107 transactions in 2022,” it said.
Residential property was the biggest contributor to the transaction volume at 62.5%, followed by agriculture at 21.1% and commercial at 8.4%.
On a separate note, MIDF noted that the KL Property Index recorded a positive return of 7.3% in the first quarter of 2023, outperforming the FTSE Bursa Malaysia KLCI’s -4.9% performance during the same period.
“The positive performance of the KL Property Index was mainly stimulated by a pause in OPR hikes in 2023, which provided a short-term relief to the sector. Unchanged OPR bodes well for (housing loan applications),” it said.
With the February loan application and loan approved data bringing a slight positive news to the property sector, MIDF believes that a sustained recovery in those figures would indicate a rebound in buying interest among consumers.
The research house maintains a “neutral” call with a positive bias on the sector, particularly developers that target properties in the mid-market and affordable segment.