RHB Research Institute Sdn Bhd (RHB Research) expects the government’s affordable housing or 1Malaysia People’s Housing programme (PR1MA) to primarily benefit construction players and contractors, on the back of increasing job flow.
O&C Resources Bhd (O&C) has been identified as one of the stocks with significant exposure to government affordable housing.
“The company has bagged a few housing jobs from the government over the last few months,” said the research house.
RHB Research also sees Malaysian Resources Corporation Bhd (MRCB), which has a PR1MA project in Kajang, as a candidate. It believes that the company is well-positioned to take on more affordable housing projects since it is also a contractor.
Set to be this year’s focus, affordable housing was the only key subject on the property market mentioned in Budget 2017, in which no material incentive or cooling measures was unveiled aside from the hike in stamp duty rate for properties costing above RM1 million (effective from 1 January 2018).
In addition to PR1MA, the government also allocated lands for affordable housing developments to government-linked companies.
“Apart from the supply side, the government has also assisted the end-financing scheme so that access to credit financing is available to the lower-income group, which typically experiences difficulties in obtaining loans,” said RHB Research.
Meanwhile, CIMB Research expects the property market to see a positive spillover effect from the potential influx of mainland Chinese buyers.
In the last two to three years, the research house noted that more Chinese companies have ventured into Malaysia’s property, construction, infrastructure and power sectors.
“We believe it is a matter of time before the Chinese become key buyers in our property market. The prolonged weakness in ringgit could potentially be a pull factor as well,” it said.
But since these buyers would likely buy from Chinese developers with a presence in Malaysia, the initial impact may not be positive for local developers until such buyers have become more aware of the local brands.
“However, overall property transaction volume and prices for the country may be supported as a result,” added CIMB Research.
Image sourced from imdavidlee
Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my
