PETALING JAYA: The Malaysian property market in 2025 is expected to continue seeing steady demand for residential properties, especially affordable housing.
AmInvestment Research, in a recent report, said the local residential property market is anticipated to maintain its momentum going forward.
Demand for residential property was robust in the first half of 2024 with total number and value of residential property transactions rising by 6.1% and 10.4% year-on-year respectively, based on the National Property Information Centre (Napic).
“We expect the momentum to continue due to favourable government policy to support the affordable housing segment, relaunching of the Malaysia My Second Home programme and sustained positive labour market conditions,” the research house stated.
Meanwhile, an analyst told StarBiz demand for industrial properties and affordable homes have been steady.
“Demand for industrial properties has picked up significantly since the Covid-19 pandemic, while affordable housing will always be sought after by potential buyers,” he said.
According to Napic, the third quarter of financial year 2024 (3Q24) saw a slight increase in both volume and value of housing transactions, with 70,520 units recorded (3Q23: 68,561 units) worth RM28.74bil versus RM28.36bil a year ago.
Overall, the property market performance improved with the number and transaction value rising by 3.1% and 0.3%, respectively.
This comprises 112,305 transactions valued at RM57.31bil, compared with 108,993 transactions worth RM57.14bil in 3Q23.
Phillip Capital Research said property transactions in the first half of 2024 trended positively, with value and volume posting a 10% and 6% y-o-y growth, respectively.
“The affordable housing segment (below RM300,000) remained the primary driver, accounting for more than 53% of total residential transactions and signs of gradual easing in the overhang.”
It added that the upcoming minimum wage hike announced in Budget 2025 may further bolster demand.
Another key focus for 2025 will be industrial property development, particularly in foreign direct investment hotspots such as Penang and Johor, with global trade diversion likely to intensify under President Donald Trump’s administration, as well as the Johor-Singapore Special Economic Zone expected to spur industry property activity in Johor.
“The industrial land sales to data centre operators present another growth avenue, as developers monetise landbanks and reinvest in strategic lands.”
The research house noted that several developers, including Sime Darby Property Bhd
, UEM Sunrise Bhd and Mah Sing Group Bhd are exploring data centre investments to meet growing demands.
Year-to-date, Phillip Capital noted that the KL Property Index (comprising the listed shares of property companies) has risen 25.8%, driven by positive sentiment surrounding data centre expansions, especially in Johor.
Nevertheless the research house added while the market shows signs of improvement with oversupply easing, underlying demand remains subdued.
“We maintain our neutral stance on the sector, adopting a cherry-picking strategy focusing on the affordable housing segment.”
Philip Capital thus prefers developers with exposure to the industrial property and affordable housing segments.
“AME Elite Consortium Bhd is a key proxy to Johor and Penang’s booming industrial property market and is poised to benefit from rising foreign direct investment inflows.
“Skyworld Development Bhd offers exposure in Penang in the affordable housing space, while Lagenda Properties Bhd is a preferred proxy for affordable housing in Johor and Kedah.”
Going forward, the research house said it projects the aggregate property sector earnings to grow 27% year-on-year (y-o-y) in 2025.
“Lagenda is expected to record a 25% y-o-y earnings growth, supported by strong sales momentum and solid take-up rates.
“Skyworld’s earnings are expected to see strong growth in 2025, underpinned by an increase in project launches.”
Meanwhile, Maybank Investment Bank Research said 2025 is set to be eventful with corporate exercises like the listing of Sunway Bhd’s healthcare business, as well as investment properties of S P Setia Bhd and WCT Holdings Bhd, to name a few.
It said thematic drivers such as data centre-related investments and land sales, are expected to sustain interests in property stocks, which have the relevant exposure.
“Sime Darby Property recently secured another 20-year lease with Google for its Elmina Business Park (77 acres), while Eco World Development Group Bhd is pursuing more data centre deals in its Selangor and Kulai (Johor) industrial parks.”
Additionally, the research house noted S P Setia is expected to finalise its Tanjung Kupang industrial park joint venture in Johor by the first half of 2025.
