KUALA LUMPUR, Jan 3 (Bernama) -- RHB Investment Bank Bhd (RHBIB) expects property sales to grow by 10 per cent year-on-year (y-o-y) in 2025 with some developers likely to focus on launching mid-range high-rise products to conserve landbanks and address potential affordability issue.
In its note on Sector Update today, the investment bank said some developers, on the other hand, would continue with their existing strategies, with additional offerings of commercial and industrial products.
It also noted that Iskandar Malaysia would continue to be in favour and should see more project launches in 2025.
"We believe overall demand for property in 2025 will remain healthy, supported by encouraging economic growth and foreign direct investments (FDIs).
"Although the market saw robust demand in 2024, we think foreign buying has yet to come in in a big way, as the price point of products launched by developers over the last one to two years were mostly below the RM1 million mark," said RHBIB.
The investment bank also maintained an “overweight” call on the property and real estate sector, with a view that developers that are establishing an asset base, have solid capital management and a monetisation strategy. It said they should garner higher valuation premiums, given their stronger earnings quality ahead.
While valuations of the big-cap property stocks would likely stay elevated, some smaller-cap quality developers may catch up, it said.
It also said other potential catalysts for the sector include the Kuala Lumpur-Singapore high-speed rail (KL-SG HSR) and Penang Special Financial Zone (SFZ).
In 2024, the property sector continued to outperform the market, with the KL Property Index rising by 31.5 per cent (versus FBM KLCI’s 12.9 per cent) last year, following a 34.5 per cent increase in 2023.
The year 2024 saw more developers moving into data centre-related investments, land transactions, and industrial developments.
RHBIB's top picks for the sector are Sime Darby Property, Mah Sing, Sunway and UEM Sunrise.
-- BERNAMA
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