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KUALA LUMPUR, Jan 6 — Property sales are expected to slow down in the first half of 2021 (1H 2021), but will see a mild rebound in 2H 2021, provided the Covid-19 situation improves, says Kenanga Research.
In a note today, it said the easing of lockdown restrictions is a positive sign as it will push the economic recovery onto the right track, but warns that a possible worsening of the Covid-19 situation may cause further setbacks.
As such, the research house has maintained its neutral call for property developers, in light of the sector’s challenging structural fundamentals of affordability, oversupply and policy issue.
Kenanga said the property overhang in Malaysia will remain and may not see marked improvement unless there is a meaningful correction in property prices in the near term to encourage demand.
“The property overhang situation is largely residential and serviced apartments, which make up 84 per cent of the total overhang,” it said, adding that high-rise units account for 54 per cent of the residential property overhang in Malaysia.
The research house believes that some developers may lower the pricing for certain product offerings in the near term to meet sales targets, as the market continues to target more affordable segments.
“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 added. — Bernama