PETALING JAYA: The total loans approved for the purchase of property was higher in April, signalling a marginally better new property sales outlook so far this year.
The positive development was led by the reopening of the economy and developers are likely to meet their new sales target in 2022, said MIDF Research.
Loan approved for the purchase of property climbed to RM16.7bil or up 6.2% year-on-year (y-o-y) in April.
This is despite the lower loan applications due to the higher percentage of total approved loan over total applied loan at 38.5% in April compared with 34% in April 2021.
It added that the number of approved loans had increased for six consecutive months.
Cumulatively, in the first four months of this year, the total approved loans grew to RM59.3bil (up 15.7% y-o-y).
The total loan applied for the purchase of property inched up marginally to RM151.6bil (up 1.04% y-o-y) cumulatively in the four months of this year.
The research house added that this indicates a marginally stronger buying-interest in property following the reopening of the economy.
MIDF Research expected the sales momentum to be supported by launches of properties in the affordable price range.
“Nevertheless, we expect the property sales outlook to improve marginally in 2022 as the House Ownership Campaign has ended,” it said.
The earnings of property companies under its coverage were mixed for the first quarter of 2022 (1Q22).
It said IOI Properties Group Bhd, Sunway Bhd, UEM Sunrise Bhd and Mah Sing Bhd had reported earnings that were in line, while S P Setia Bhd and UOA Development Bhd reported earnings that missed expectations.
New property sales in 1Q22 were mostly in line with management sales targets.
Going forward, it said the earnings of property companies would largely be subdued as earnings may be hurt slightly by the rising raw material costs.
It has a “buy’’ call on Mah Sing with a target price (TP) of 74 sen a share and IOI Properties Group (TP: RM1.29 a share).
It said Mah Sing recorded higher earnings in 1Q22 mainly due to contributions from the property development division.
It is also positive on IOI Properties Group as it expected a brighter outlook for its property investment as well as the leisure and hospitality divisions following the reopening of the economy.