Property developers poised for growth as housing loans increase
KUCHING: Property sales are poised to grow in 2017 after three consecutive months of year on year (y- o-y) increase in approved loans.
Based on Bank Negara Malaysia Monthly Statistical Bulletin for March 2017, approved loan for the purchase of property (ALPP) has increased three per cent y- o-y to RM11.43 billion.
This increase is mainly driven by the 20 per cent increase in loan application which implies that demand has improved significantly, explained MIDF Amanah Investment Bank Bhd ( MIDF Research) yesterday.
“Note that the ALPP numbers has shown third consecutive months of positive growth y- o-y and hence we believe that the uptrend of better sales for developers has just been confirmed.
“For the first quarter of 2017, approved loan grew by nine per cent to RM28.62 billion. On a monthly basis, ALPP surged 35 per cent month on month (m- o-m) due to 40 per cent increase in loan application.
“In our view, the higher approved loan disbursed into the market is a good leading indicator that property transactions value have increased and hence property developers sales should naturally improve.”
Meanwhile, property transaction value has shown trend reversal in the last quarter of 2016 (4Q16).
According to the latest Property Market Report released by National Property Information Centre ( NAPIC), Malaysia property market transaction value has improved 60 per cent quarter on quarter (q- o- q) and 38 per cent y- o-y to RM49.6 billion in 4Q16.
By segment, the highest growth in transaction value is seen for ‘commercial’ property with price range above RM1 million. We believe that the data reflects demand recovery among consumers due to stable ringgit and employment outlook.
Consumer Sentiment Index has improved in 1Q17 as according to the latest publication from Malaysian Institute of Economic Research ( MIER), 1Q17’s Consumer Sentiment Index (CSI) has improved to 76.6 from 4Q16’s 69.8 and 1Q16’s 72.9.
“We gather that consumers are generally more optimistic and have indicated their cautiously ambitious spending plans,” MIDF Research added. “We believe that the data suggest that the demand outlook for property among the potential buyers has improved and this should translate to better sales in 2017.”