KUALA LUMPUR: Buying sentiment in Malaysia's property market is still holding up well, supported by higher loan applications and approvals, according to MBSB Research.
The research house maintained its neutral stance on the sector, citing concerns that inflationary pressures and rising costs could moderate demand and weigh on developers' earnings in the coming quarters.
MBSB Research said total loan applications for property purchases rose 15.9% month-on-month and 11.8% year-on-year (y-o-y) to RM62.8bil in April 2026, rebounding from weaker levels in March due to the Hari Raya holiday.
On a cumulative basis, loan applications in the first four months of 2026 increased 1.8% y-o-y to RM206.6bil.
"Overall, buying sentiment is still holding up well as Malaysia still maintains fuel subsidies for RON95 and the logistics sectors.
“Nevertheless, we are slightly less sanguine on buying sentiment going forward as buying sentiment may moderate amid inflationary pressures," MBSB said in a sector report.
Approved loans for property purchases increased 22.4% month-on-month and 8.3% y-o-y to RM26.9bil in April, although the approval rate declined to 40.6% from 44.3% a year earlier.
“We reckon that the lower approval rate could be due to banks adopting a more stringent stance amid geopolitical tensions,” the research house.
Meanwhile, earnings from property developers under MBSB Research's coverage were mixed in the latest reporting season, with four out of six companies reporting results that met expectations.
IOI Properties Group Bhd
posted the strongest earnings growth, with third-quarter core net profit surging 134.7% y-o-y to RM260.6mil, driven by land sales in Malacca and contributions from its Singapore assets.
Mah Sing Group Bhd and Sunway Bhd recorded earnings growth of 6.8% and 5.9%, respectively, while Matrix Concepts Holdings Bhd, UOA Development Bhd and S P Setia Bhd reported lower earnings.
“Going forward, we see that earnings outlook to be slightly subdued going forward as cost pressures are expected to become more apparent in the coming quarters.
“On the other hand, property sales were largely subdued in 1QCY26 due to the festive period but expected to pick up in the coming quarters,” MBSB said.
The research house maintained its "buy" call on Mah Sing with an unchanged target price of RM1.25, citing resilient sales of affordable homes.
It also retained its "buy" recommendation on IOI Properties with an unchanged target price of RM4.64, supported by active monetisation of non-core landbank and the planned listing of IOIPG REIT, which is expected to unlock the value of its investment properties.
Matrix Concepts remained another top pick, with MBSB Research maintaining a "buy" call and target price of RM1.55. The research house said the MVV City development remains a near-term catalyst, while contributions from its Sendayan and Klang Valley developments are expected to support stable earnings growth.
"While the loan application data in April 2026 indicates that buying sentiment remains steady in 4MCY26, we think that buying sentiment may moderate going forward if inflation trends higher.
"Besides, we see that cost pressure may weigh on the earnings of property companies in 2HCY26. Hence, we maintain our ‘neutral’ stance on the sector," it said.
