MIDF Research revealed on Friday (27 April) that shares of property firms listed in Bursa Malaysia either perform the best or the worse after the conclusion of a general election, reported The Sun Daily.
For instance, the Kuala Lumpur Property Index surged by 22.8 percent a month after the 13th General Election (GE13) compared to the 4.8 percent increase in the wider Kuala Lumpur Composite Index (KLCI).
But the former also suffered a sharper decline of 10 percent versus the 5.8 percent drop in the latter one month after the 12th General Election (GE12).
“We have examined the past performances of KL Property Index against KLCI for the period one month prior and one month after GE13 in 2013 and GE12 in 2008. KL Property Index has been historically more sensitive to broader market movement due to its high beta nature,” said the research house.
But if property stocks increase after the 14th General Election (GE14) on 9 May 2018, the quantum of increase is likely to be slightly lower given the prevailing high interest rates.
Nevertheless, MIDF Research is maintaining its bullish view on the real estate industry as there are good buys after the recent stock sell-down.
However, it could shift to a pessimistic outlook if Malaysia’s House Price Index (HPI) really fell for two straight quarter in Q4 2017, as the preliminary data show that the index dipped from 190.1 in the prior quarter to 190.
“Note that this will be the first sequential decrease in HPI since 2009 if actual HPI for Q4 2017 turns out to be lower quarter-on-quarter. This may change our current view of stable property prices outlook,” it added.
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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