MIDF Amanah Investment Bank Bhd (MIDF Research) has maintained its POSITIVE outlook on the property sector, citing stronger buying interest in the market. The sector's outlook for 2025 remains promising, buoyed by a steady recovery in buying sentiment, favourable catalysts such as the Johor-Singapore Special Economic Zone, the Johor Bahru–Singapore Rapid Transit System Link and a stable Overnight Policy Rate of 3%. The research house noted that the recent performance of the KL Property Index, which saw a 31.5% increase in 2024, outpacing the KLCI's 12.9% gain, reflects the sector's resilience.
In terms of loan activity, Bank Negara Malaysia's (BNM) data revealed a slight decline of 2% month-on-month in total loan applications for property purchases to RM55.3 billion in November 2024. However, compared to the same period last year, loan applications grew by 14%. Cumulatively, total loan applications for the year stood at RM587.7 billion as of November, marking a 4.8% year-on-year increase. MIDF Research interpreted this as a sign of sustained interest in property, supported by a favourable borrowing environment.
While the approved loans for property purchases saw a 10.8% drop month-on-month to RM21.7 billion in November, the total amount approved for the first 11 months of 2024 was up by 6.7% year-on-year to RM259.6 billion, in line with stronger new property sales from developers. The loan approval ratio showed a minor decrease from 43.2% in October to 39.3% in November but remained steady overall.
MIDF Research's top stock picks for the property sector are Mah Sing Group Bhd and Matrix Concepts Holdings Bhd. The research house has maintained a BUY rating on Mah Sing Group, with a target price (TP) of RM2.08, noting the company's strong sales performance and its strategic landbank expansion in Johor, which positions it well to tap into the booming property market in the region. Mah Sing's sales for the first nine months of the financial year of 2024 (9MFY24) reached RM1.85 billion, putting it on track to meet its full-year target of RM2.5 billion.
Similarly, Matrix Concepts has received a BUY recommendation, with a revised TP of RM2.60, up from RM2.48. The increase reflects improved earnings visibility from the MVV City development, which broke ground in December 2024. The 2,382-acre development, with a gross development value of RM12 billion, is expected to drive significant sales and earnings growth for the company beyond FY27. Matrix Concepts has already achieved RM663 million in new sales for the first half of FY25, on track to meet its full-year sales target of RM1.39 billion.
