TA Research said price levels would be an attractive entry point into fundamentally strong developers as monetary policy turns more accommodative.
PETALING JAYA: Budget 2026 will be a catalyst for domestic property stocks following the National Property Information Centre (Napic) data that showed a 1.3% decline in volume transactions but a 1.9% increase in value for the first half of 2025 (1H25) compared with 1H24.
TA Research, which has maintained an “overweight” recommendation for property stocks, said Budget 2026 would be an opportunity for a re-rating with valuations still below last year’s peaks.
Price levels would be an attractive entry point into fundamentally strong developers as monetary policy turns more accommodative, said the research house.
Among property stocks covered, Sime Darby Property Bhd
has a “buy” call with a target price (TP) of RM2.05 for its strong execution under the company’s growth strategy, leadership in industrial development, robust financial performance and growing base of recurring income.
The research house also has a “buy” call on IOI Properties Group Bhd with a TP of RM2.78 for its strategic land bank in Johor, solid presence in key growth corridors, and strengthening contributions from its property investment segment including the upcoming real estate investment trust listing.
It expected Budget 2026, the first under the 13th Malaysia Plan, to introduce structural measures such as the establishment of a national housing agency, clarification of the build-then-sell model, operationalisation of the Urban Renewal Act and alignment of incentives with the National Energy Transition Roadmap to promote green and productive construction.
At the same time, the government’s reaffirmation of large transport infrastructure projects such as the Light Rapid Transit 3, Rapid Transit System and East Coast Rail Link together with fiscal support for the Johor-Singapore Special Economic Zone (JS-SEZ) and other economic corridors would provide a broader growth dimension.
“The JS-SEZ is set to benefit from data centre, logistics, and advanced manufacturing inflows while Penang continues to deepen its electrical and electronics ecosystem.
“The Sarawak Corridor of Renewable Energy and Sabah Development Corridor are expanding downstream energy, industrial, and logistics capacity,” it said, adding that corridor-led investments drove land and industrial demand, created jobs, pushed wage growth and improved structural housing affordability beyond temporary subsidies.
Meanwhile, Napic reported that the property market recorded 196,232 transactions worth RM107.7bil, reflecting a 1.3% decline in volume but a 1.9% increase in value compared with the first half of 2024 (1H24).
Market activity was mixed across segments: commercial and agricultural volume contracted by 1.3% and 4%, while industrial and development land transactions grew by 8.5% and 3.7%.
“In value terms, commercial, industrial, and development land rose 3.1%, 5.6%, and 18.3%, respectively, while agriculture fell sharply by 11.3%,” said TA Research.
Within the residential segment, which accounts for the bulk of market activity, it noted that transactions slipped 1.4% year-on-year in volume and edged down 0.1% in value.
“Kuala Lumpur, Johor, Selangor, and Penang, which collectively accounted for around half of national transactions, also posted only slight contractions of 0.2% in volume and 0.1% in value compared with 1H24,” said the research house.
