KUALA LUMPUR: Steady and relatively accommodating borrowing rates could sustain the property market's strength through the end of the year, according to Kashif Ansari, group chief executive officer and co-founder of Juwai IQI.
He noted that the real estate market has performed well since last year due to stable and reasonable interest rates.
In the first quarter, the National Property Information Centre's (NAPIC) median house price in Malaysia of RM335,000 was higher than in any prior year, apart from 2023, Ansari said.
"The property overhang keeps getting better, where the number of completed but unsold properties is now fewer than 24,000 units and has improved by more than 40 per cent," he told Business Times.
Of the seven states with the largest overhang at its peak in the fourth quarter of 2021, Kashif said Kedah, Selangor, and Pulau Pinang had the largest property overhang reductions.
He stated that the overhang in Kedah shrank by 93 per cent while the overhang in Selangor and Pulau Pinang was reduced by 51 percent and 50 per cent respectively.
According to Kashif, home price growth is expected to continue to be moderated for the rest of this year, where it could be around the same 3 per cent growth experienced in 2023.
"That growth is supported by our forecast for rates to remain stable and for the economy to continue to grow on solid international and domestic consumer demand," he added.
He said the overnight policy rate (OPR) is expected to remain unchanged into 2025, which means steady interest rates are a good sign for the economy.
Meanwhile, MIDF Research said the performance of the KL Property Index in the first half of this was decent, with gains of 25 per cent, outperforming FBM KLCI's gains of 9.3 per cent.
"The strong performance of property counters was mainly due to the recovery in the property sector in Malaysia, which was supported by the status quo of the OPR at 3 per cent and stronger buying interest on property amid the recovery in the economy.
"Besides, positive news flow on data centre ventures by property companies, the establishment of the Johor-Singapore Special Economic Zone (SEZ), and ongoing infrastructure projects, namely the Johor Bahru-Singapore Rapid Transit System (RTS) Link and Penang LRT, boosted sentiment on property counters," it said in a research note today.
The firm maintained its positive stance on the property sector, as the positive loan application data signals stronger buying interest, which should underpin the earnings outlook of developers.
Economist Dr. Geoffrey Williams said the ringgit has stabilised in the last few months following intervention by Bank Negara Malaysia (BNM), is still affected by external factors, and will continue to be for the rest of the year.
"There is still a great deal of geopolitical risk with elections in Europe and the forthcoming election in the United States (US).
"We do not expect changes in the OPR this year, and the ringgit might strengthen as the global economy normalises," he said.
According to him, inflation is around historical averages now, and hence, the OPR does not need to be revised.
"This means the interest rate environment will be stable, and businesses and consumers can make clearer decisions," he added.