BIMB Securities sees stronger 2025 for developers, keeps 'overweight' sector rating

• "We favour developers with strong sales history, reputable brands, substantial land holdings in desirable locations, and minimal holding costs," it said in a note on Thursday.

KUALA LUMPUR (Aug 22): The property market is poised to strengthen in 2025 due to the potential of increased affordability, amid the proposed Madani Deposit initiative and related proposals in Budget 2025, said BIMB Securities.

The research house maintained its ‘overweight’ recommendation on the property sector.

"We favour developers with strong sales history, reputable brands, substantial land holdings in desirable locations, and minimal holding costs," it said in a note on Thursday.

As such, it maintained its 'buy' calls on Mah Sing Group Bhd (KL:MAHSING) with a target price (TP) of RM2.07, Matrix Concepts Holdings Bhd (KL:MATRIX) with a TP of RM1.99, Lagenda Properties Bhd (KL:LAGENDA) with a TP of RM1.48, and Sime Darby Property Bhd (KL:SIMEPROP) with a TP under review.

On Wednesday, the Ministry of Housing and Local Government proposed the Madani Deposit initiative, alongside 32 other proposal submissions, totalling nearly RM1 billion under Budget 2025.

The proposed initiative would provide up to RM30,000 financial assistance for first-time homebuyers, easing monthly payment commitments, particularly for youths in the bottom 40% and middle 40% income groups.

“Buyers are likely to have greater confidence in purchasing properties, knowing that their payments are protected, and that there are measures in place to prevent project abandonment,” added the research house.

The initiative would also see a shift in property developers' focus towards more affordable housing projects.

“We anticipate a potential shift in developers' focus towards building more affordable homes to capitalise on the increased demand from first-time buyers,” it added.

The research house cited the current joint-venture project between Lagenda Properties and Sime Darby Property, namely Seed Homes Lagenda, an affordable township development in Gurun, Kedah.

Lagenda Properties has also taken this trend a step further by offering double-storey homes in Mersing, Johor, at budget-friendly prices.

Meanwhile, financial institutions could also benefit, as more first-time buyers eligible for loans would expand their home loan market.

Additionally, the introduction of escrow accounts will mitigate the risk of lending for projects that may be abandoned, thereby reducing the likelihood of non-performing loans.

Overall, the property market is poised to strengthen going into 2025 due to the Madani Deposit initiative, alongside the shift in developer focus, increasing affordability, and excitement in property market activities.

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