The pause in OPR hike provided short-term relief to the property sector as the four consecutive OPR hikes by a total of 100 bps in 2022 hurt affordability of property buyers. – Bernama photo
KUCHING (Feb 15): Analysts believe that buying interests for property might improve this year, with the absence of overnight policy rate (OPR) hikes.
Bank Negara Malaysia paused OPR hike in January 2023 by keeping OPR unchanged.
“The pause in OPR hike provided short-term relief to property sector as the four consecutive OPR hikes by a total of 100 bps in 2022 hurt affordability of property buyers.
“We see that the pause in OPR hike to be short term positive to property sector as property buyers are still digesting the several OPR hikes in 2022.
“The euphoria of temporary pause of OPR hike lifted KL Property Index by 2.3 per cent for the period January 19, 2023 to date. Looking ahead, we see that buying interest on property may recover slightly following the pause in OPR hike,” the research team at MIDF Amanah Investment Bank Bhd (MIDF Research) said in a report.
Meanwhile, it noted that total loan approved for purchase of property eased slightly by one per cent month-on-month (m-o-m) in December 2022 after decline of 12 per cent m-o-m in November 2022.
The decline in approved loan was mainly due to lower loan application which cushioned by higher percentage of total approved loan over total applied loan of 45 per cent in December 2022 (November 2022: 42.5 per cent).
On a yearly basis, it saw that approved loans dropped by 18.8 per cent y-o-y in December 2022 following a decline of 15 per cent y-o-y in November 2022.
“We see that the double-digit decline for two consecutive months does not bode well for new sales outlook for property developers,” MIDF Research remarked.
“While the continuous decline in loan application is slight negative to the sector, the pause in OPR hike may support recovery of buying interest going forward.
“Hence, we maintain our ‘neutral’ stance on property sector,” it added.