Property loan applications moderates in Feb to RM40 bln

KUCHING: Property loan applications in February had moderated by 21 per cent month on month (m-o-m) to RM40.1 billion.

In a sector update report, the research arm of MIDF Amanah investment Bank Bhd (MIDF Research) guided that the sharp drop was largely due to the short month in Feb.

Though they also pointed out that February loan applications also fell by 19 per cent year over year (y-o-y), the first y-o-y drop in eight months as demand for property took a breather.

“Nevertheless, total loan application in the first two months of 2024 (2M24) was higher at RM91 billion or 8 per cent y-oy- which indicates stronger demand for property,” said the research arm.

Similarly, approved loan for purchase also fell during the month but at a lower rate of 14.5 per cent m-o-m to RM17.4 billion. And on a yearly basis, this dropped by a milder 6 per cent y-o-y drop in contrast to the steep 19 per cent y-o-y loan application drop.

According to the research arm, this was due to higher percentage of total approved loans over total applied loan of 43 per cent in February 2024 against the 38 per cent recorded in the previous year.

Cumulatively, total approved loan in 2M24 increased by 14.2 per cent y-o-y to RM37.8 billion.

“The higher approved loan underpins expectations of better new sales of property developers,” said the research arm.

Looking ahead, MIDF Research opined that buying interest on property will grow stronger in 2024 as outlook for the property sector remains positive.

As such they maintain their ‘positive’ stance on the property sector as they observe that the landscape for the property sector is improve with stable house price index (HPI) outlook, an unchanged overnight policy rate (OPR) of 3 per cent, and improving residential overhang.

The research arm pointed out that data from the National Property Information Centre (NAPIC) had indicated that Malaysia’s HPI has resumed on an uptrend since 2022.

“Besides, the upcoming infrastructure projects such as Johor Bahru-Singapore Rapid Transit System (RTS) Link and Penang LRT will further improve connectivity and support buying sentiments on property in Malaysia,” they added.