THE local property sector has been languishing over the past five to six years since moving up in mid-2013 when the House Price Index (HPI) showed double-digit growth.
Bearish sentiment is expected to linger a while longer as the 2H 2021 property sector outlook remains cautious. Movement control orders and economic restrictions cause a slower-than-expected recovery. This is as according to AmResearch.
Banks have remained prudent in residential property lending to mitigate the risk of more borrowers falling into negative equity and to limit the increase in loan loss provisions. “Although loans applied for residential properties reached an all-time historical high in April 2021 – reflecting improved consumer sentiments in the sector – banks’ average approval rate slid to only 34.2% from 37.4% a year ago,” observed AmResearch.
The situation has been further exacerbated by the softer job market as reflected in the still elevated unemployment rate of 4.7% in January-May 2021 (vs 4.1% year-on-year).
Reference:
AmResearch: Lockdown weighs down property sector recovery, Cheah Chor Sooi, Focus Malaysia, 15 July 2021
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