PROPERTY SECTOR

THE property market will remain lacklustre in 2017, dragged down by the persistently weak sentiment, low affordability and rising incoming supply, said Alliance DBS Research.

It said that while new launches have been subdued over the past few years, the takeup rate of 31.4% in 2016 was also the lowest in the past 10 years.

The research house said more high-rise completions were expected in the second half of 2017 to the first half of 2018 due to the delivery of projects with the developer interest-bearing scheme (DIBS), which developers capitalised on before it was banned effective January 2014.

“Most developers have registered relatively weak new property sales in the first quarter of the year vis-à-vis their respective FY17 sales target, and are banking on more aggressive launches in H2’17 to replenish their unbilled sales.

“However, we expect Malaysia’s property market to remain challenging given the intensifying competition from newly completed projects and affordably-priced public housing which are all vying for the same pool of genuine home-buyers,” it said in a note.

While some developers may have downside risk to their FY17 sales target, the research house expects township developers such as Eco World and Matrix Concepts to stand a better chance at achieving good sales.

This is given their integrated township developments which are typically driven by landed properties.

“Property buyers continue to be drawn to affordably-priced products with lifestyle amenities,” it said.

It said Malacca-based property developer Yong Tai stood out as a one-of-its-kind developer, boasting competitive advantages from its unique tourism appeal and synergistic property developments in the state via its 138-acre Impression City which has received overwhelming response for its maiden launch.

It added that the opening of Impression Melaka in February next year will be a major catalyst for the company.

It has a “buy” call on Yong Tai with a target price of RM2.10.