Property Buyers to Return in 1H14, Says
CIMB
CAP: Islamic Bank Loans Are a Rip-Off
tenure.
CAP calls on Bank Negara to
protect borrowers by enforcing
the following steps:
•
While it believes buying appetite will
return to the real estate market in the
first half of next year (1H14), CIMB
Research continues to be cautious
on commercial properties given the
existing glut in office space.
CIMB Research analyst Terence Wong
said in a report that occupancy for
commercial properties in the Klang
Valley stood at around 80%. “The
situation can deteriorate if significant
new supplies come onstream,
particularly with the development
of numerous mega projects by the
government.”
Wong said the harsh measures
introduced in Budget 2014 to
curb speculation in the property
market have caused buyers to take
a pause. However, he expects the
buying appetite to return in 1H14
on the back of robust demand for
residential properties, amid concerns
of inflationary pressure from the
implementation of the goods and
services tax (GST).
The impact of the policy changes by
the authorities, though negative in
the short term, should be positive
over the longer term, as they will help
remove froth from segments of the
market, he said.
In July, Bank Negara Malaysia capped
the maximum housing loan tenure to
35 years instead of 45 years.
Under Budget 2014, the government
also raised the real property gains
tax and put a stop to the developers’
interest bearing scheme (DIBS). It also
increased the minimum purchase
price of properties for foreigners from
RM500,000 to RM1 million.
“We believe that buying interest
should progressively return in 1H14
as potential house buyers come to
the realisation that property prices
are unlikely to fall and that potential
inflationary pressure from the
implementation of the GST in April
2015 could push up property prices
further.”
According to CIMB Research, buying
interest should progressively return in
1H14 as potential house buyers come
to the realisation that property prices
are unlikely to fall.
CIMB Research has maintained its
“overweight” call on the property
sector, picking Mah Sing Group Bhd
as its preferred property counter,
as well as UEM Sunrise Bhd for
having the best exposure to Iskandar
Malaysia in Johor.
The research firm changed its rating
on Mah Sing from “outperform” to
“add”.
“Mah Sing remains our top pick for
the property sector, with its robust
earnings growth, strong sales
and active land banking being the
potential rerating catalysts,” said
Wong.
He said despite the property cooling
measures, Mah Sing’s sales should
sustain in the fourth quarter of its
financial year 2013 ending Dec 31 as
its new flagship township, the RM5.13
billion Southville project in Bangi, has
already been launched and is enjoying
strong interest.
“We believe that Mah Sing will be able
to weather any slowdown well as most
of its projects do not offer DIBS.
Wong added that the company should
be able to achieve its financial target
as its landbanking efforts in 2013
have been strong. During the year, it
acquired five pieces of land (three in
the Klang Valley and one each in Johor
and Sabah)