Given positive news flow that could lift market sentiments, such as the revival of major infrastructure projects, a potential review of the Malaysia My Second Home (MM2H) program, other potential catalytic developments, and a stable interest rate outlook, RHB Investment Bank research has maintained its “overweight” rating on the property sector and said it remains upbeat on the sector.
The research firm predicted further growth in property sales for both this year and next, as well as long-term improvement in the Johor real estate market, in a market report published on Monday (July 17).
According to RHB’s Loong Kok Wen, the Iskandar real estate market has been benefiting from positive press coverage in recent months.
A few examples were given by her: i) the planned Johor-Singapore special economic zone, ii) a review of MM2H, and iii) discussions to resurrect the KL-Singapore high-speed rail project. As a high-beta industry, real estate has been gaining steam since early July.
Loong said that equities market confidence was negatively affected by the ringgit’s steep depreciation in the second quarter, but that the inexpensive currency has helped to boost spending by foreign tourists, particularly those from Singapore.
Colleagues and corporations we met on our recent trip to Johor told us that Singaporean tourists have begun flocking there earlier in the week, on Fridays.
The number of daily tourists from Singapore is expected to rise after the Johor Bahru-Singapore Rapid Transit System is finished in 2026.
We expect this to have a beneficial effect on the housing market in the near future, she added.
According to Loong, the market anticipates either no more rate increases in 2H2023 or one further increase.
“With interest rates on a road towards normalization, this should provide homebuyers and investors some peace of mind.
“Current mortgage rate stands at about 4.5-4.7%, back to the pre-pandemic levels,” she said.