Kuala Lumpur: Malaysia's property sector is anticipated to maintain its resilience in 2025, driven by steady buying interest, a reduction in property overhang, and significant catalysts such as the Johor-Singapore Special Economic Zone (JS-SEZ) and the Johor Bahru-Singapore Rapid Transit System (RTS), as stated by a research house.
According to BERNAMA News Agency, MIDF Amanah Investment Bank Bhd's research division, MIDF Research, highlighted in a research note that most developers set slightly higher new sales targets the previous year, which are on track to be achieved and are projected to support earnings growth in the current year.
Property companies are anticipated to report stable fourth-quarter 2024 earnings, fueled by consistent sales and smooth project progress despite concerns about labor shortages, with results expected by the end of this month, as indicated by the research house. While many developers are preparing to announce their new sales targets soon, the expectation is for the new sales momentum to remain stable and slightly stronger in 2025, as Malaysia's property market continues to be healthy with decreasing property overhang and catalysts from JS-SEZ, RTS, and data center development.
On the subject of total loan applications, MIDF noted that data from Bank Negara Malaysia (BNM) revealed a six percent year-on-year (y-o-y) increase, reaching RM47.4 billion in December 2024, following a 13.9 percent y-o-y growth in November. Buying interest remained robust in 2024, with total loan applications for property purchases hitting RM635 billion, marking a 4.9 percent y-o-y rise after a 5.6 percent y-o-y growth in 2023.
The overall buying interest in property was strong in 2023 and 2024, following the reopening of the economy and with catalysts such as JS-SEZ and RTS bolstering buying interest. Meanwhile, approved loans for property purchases soared 32.6 percent y-o-y to RM23.7 billion in December 2024, up from a 4.6 percent increase in November, driven by a higher approval ratio of 50 percent compared to 40 percent in December 2023.
Cumulatively, total approved loans increased to RM283 billion in 2024, an 8.5 percent y-o-y growth following a 7.3 percent increase in 2023. The loan approval ratio remained relatively stable at 44 percent in 2024, indicating improved new property sales and better earnings visibility for developers.