PETALING JAYA: The outlook for Malaysia’s property sector remains positive, underpinned by healthy demand, as evidenced by increased loan applications for the purchase of property in the country.

According to the latest data from Bank Negara, loan applications for purchases of property increased 0.9% month-on-month (m-o-m) in September 2023 after growing 4.8% m-o-m in the preceding month.

On an annual basis, loan applications in September rose 15.6% year-on-year (y-o-y), bringing cumulative loan applications higher at RM457.9bil, up 2.6% y-o-y, for the first nine months of this year.

MIDF Research said the data suggested buying interest in properties remained healthy following the reopening of the economy and country’s borders post-Covid-19.

As such, the brokerage maintained its “positive” stance on the sector.

“The positive outlook for the property sector remains intact. The latest data from Bank Negara shows that demand for property remains healthy, while higher approved loans indicate a better outlook for new sales,” the research house said.

“Besides, the unchanged overnight policy rate is positive for the sector as demand for property will remain supported,” it added.

MIDF Research said it expected demand for affordable homes to remain resilient, hence, property developers that focus on this segment would see robust new sales, it added.

It listed Mah Sing Group Bhd and Matrix Concepts Holdings Bhd as its top picks, with target prices of RM1.01 and RM1.86, respectively, as both companies had a strong presence in the affordable-homes segment.

Meanwhile, MIDF Research said the property sector would benefit from potential new infrastructure projects in the country, citing the Ipoh-Kuala Lumpur high-speed rail (HSR) project as an example. The proposal needs to secure approval from the transport ministry as well as consent from the Selangor government before conducting a feasibility study.

If it is approved, the project would benefit the property sector in Malaysia as it improves connectivity between Perak and Selangor, the research house said.

“We think that if Ipoh-KL HSR is implemented, that will improve demand for property in Ipoh and benefit property developers that have exposure in Ipoh,” it added.

MIDF Research noted Sunway Bhd could benefit as its Sunway City Ipoh has more than 300 acres of land remaining with potential gross development value of RM3.7bil. Additionally, Sunway is targeting to open a new hospital in Ipoh by 2025, the research house added.