‘Higher loan ap­provals will lead to more sales’

New Straits Times - - Business -

KUALA LUMPUR: Prop­erty de­vel­op­ers are poised to see higher sales this year af­ter three con­sec­u­tive months of year-on-year in­crease in ap­proved loans, said MIDF Re­search.

Based on Bank Ne­gara Malaysia’s monthly sta­tis­tics, ap­proved loans for the pur­chase of prop­erty had in­creased three per cent year-on-year to RM11.3 bil­lion.

This was mainly driven by the 20 per cent in­crease in loan ap­pli­ca­tion, which im­plied that de­mand had im­proved sig­nif­i­cantly.

In the first quar­ter, ap­proved loans grew nine per cent to RM28.62 bil­lion.

“This is a good lead­ing in­di­ca­tor that prop­erty trans­ac­tion value has in­creased and, hence, prop­erty de­vel­op­ers’ sales should nat­u­rally im­prove,” said MIDF Re­search in a re­port yes­ter­day.

Ac­cord­ing to the Na­tional Prop­erty In­for­ma­tion Cen­tre (Napic), prop­erty mar­ket trans­ac­tions had im­proved 60 per cent quar­ter-on-quar­ter and 38 per cent year-on-year to RM49.6 bil­lion in the fourth quar­ter of last year.

By seg­ment, the high­est growth was seen in com­mer­cial prop­er­ties priced above RM1 mil­lion.

MIDF Re­search be­lieved that the Napic data re­flected de­mand re­cov­ery among con­sumers due to a sta­ble ring­git and employment out­look.

It also said the lat­est pub­li­ca­tion from Malaysian In­sti­tute of Eco­nomic Re­search showed that the Con­sumer Sen­ti­ment In­dex in the first quar­ter had im­proved to 76.6 from 69.8 in the fourth quar­ter of last year.

“We gather that con­sumers are gen­er­ally more op­ti­mistic and have in­di­cated their cau­tiously am­bi­tious spend­ing plans,” said MIDF Re­search.

The House Price In­dex, mean­while, re­mained pos­i­tive as it grew 5.6 per cent year-on-year to 243.3 in the fourth quar­ter, al­though it was lower than the fiveyear av­er­age of 9.1 per cent.

Among the key states, the high­est year-on-year growth was recorded in Se­lan­gor (8.2 per cent), fol­lowed by Johor (7.7 per cent), Kuala Lumpur (5.3 per cent) and Pe­nang (0.7 per cent).

MIDF Re­search up­graded the sec­tor to “pos­i­tive”, with SP Se­tia Bhd as its top pick.

It re­cently up­graded SP Se­tia to “buy” due to pos­i­tive news flow sur­round­ing the I&P Group Sdn Bhd deal and good div­i­dend yield of five per cent.

Other stocks with “buy” calls are Eco World De­vel­op­ment Bhd and Eastern & Ori­en­tal Bhd.

UOA De­vel­op­ment has been down­graded to “neu­tral” due to lim­ited up­side.

Be­sides, its share price had risen 14 per cent since MIDF Re­search last up­graded the stock on Novem­ber 24 last year. Syahira Az­izi

Data from the Na­tional Prop­erty In­for­ma­tion Cen­tre shows re­cov­er­ing de­mand among con­sumers, which MIDF Re­search be­lieves is due to a sta­ble ring­git and employment out­look.

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