News: Property Sales To Rebound In H2 2021, Says Kenanga Research

Jan 7, 2021

Property sales are expected to slow down in the first half of 2021 (H1 2021), before registering a slight rebound in H2 2021, provided the COVID-19 situation improves, according to Kenanga Research.

The research house described the easing of lockdown restrictions as a positive sign since it will bring the economic recovery to the right track. However, it warned of possible setbacks should the COVID-19 situation worsen, reported Bernama.

In view of the sector’s challenging structural fundamentals of oversupply, affordability and policy issue, Kenanga Research maintained its ‘neutral’ call for the sector.

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The property overhang in Malaysia is expected to remain, it said, adding that it may not register any marked improvement unless a meaningful correction in property prices is seen in the near-term.

The research house noted that the property overhang situation is mainly residential and serviced apartments, which comprise 84% of the total overhang. High-rise units, on the other hand, account for 54% of Malaysia’s residential property overhang.

Kenanga expects some developers to slash pricing for some of their product offerings in the near term to achieve their sales targets.

“Affordability will remain a major concern and we believe the government’s move to extend the Home Ownership Campaign and stamp duty exemption until 2025 — although positive — may not be sufficient to spur strong property demand,” it said.

 

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