Stronger 2H 2025 Property Sales Expected To Balance Weak 1H -- Kenanga Research
KUALA LUMPUR, Oct 2 (Bernama) -- Malaysia’s property sector is expected to see stronger sales in the second half of 2025 (2H 2025), offsetting 1H 2025’s weaker performance, according to Kenanga Research.
In a note today, the research house said more project launches are slated in the coming months, providing the momentum needed to balance the sector’s sputtering start to the year.
“We anticipate the generally higher year-on-year sales targets to have a lower land sale composition as most developers have rationalised their land banks or completed strategic land disposals, particularly for data centre opportunities,” it said.
Kenanga said it is reassessing the sector with a fresh perspective, favouring developers with less exposure to the affordable segment.
“Multiple measures were introduced to be supportive of consumption, including the recent BUDI MADANI RON95 (BUDI95) initiative, the overnight policy rate (OPR) cut to 2.75 per cent, in addition to our expectation of more government support for lower-income groups in the upcoming Budget 2026.
“While such policies aim to sustain day-to-day spending power, they reflect a lower capacity for large-ticket discretionary purchases such as homes, particularly among lower-income households,” it said.
Kenanga Research said this view is substantiated as banks reduce lending for lower-end mortgages, and is reflected in the slightly weaker industry home mortgage approval rates.
“We, therefore, shift our preference towards developers with a smaller share of affordable housing units, as they are better positioned for earnings sustainability and resilience amid policy or market risks that disproportionately affect lower-income buyers,” it said.
Kenanga Research upgraded its call on the sector to “Overweight” from “Neutral”, citing resilient demand in higher-value residential and industrial properties.
Its top picks are Sime Darby Property Bhd with a target price (TP) of RM1.95, and SP Setia Bhd (TP: RM1.43).
-- BERNAMA