The local property market may turnaround in the second half of this year, provided the Covid-19 situation improves but Kenanga Research warns of possible setbacks if the situation worsens.
For now, the research house expects property sales to slow down in the first half of 2021 (1H 2021), followed by a mild rebound in 2H 2021.
In a note today, it said the easing of lockdown restrictions is a positive sign as it will push the economic recovery onto the right track.
The firm has maintained its neutral call for property developers, given the sector's challenging structural fundamentals of affordability, oversupply, and policy issue, reported Bernama.
Regarding the property overhang situation in Malaysia, Kenanga Research does not expect to see marked improvement unless there is a meaningful correction in property prices to encourage demand.
The property overhang situation is largely residential units, which make up 84 per cent of the total overhang in Malaysia. High-rise units account for 54 per cent of the residential property overhang, it said.
The firm thinks that some developers may lower the pricing for certain product offerings in the near term to meet sales targets.
However, it said that affordability will remain a major concern.
The firm said that in spite of the government's move to extend the Home Ownership Campaign and stamp duty exemption until 2025, it may not be sufficient to spur strong property demand.
Source: NST.com.myPrev. Article Next Article