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KUALA LUMPUR (May 11): Malaysia’s developers, still unscathed from the Iran war fallout, are benefiting from strong demand for luxury and premium homes, RHB Research said.
Foreigners, “upgraders” and “downsizers” are fuelling demand for high-end properties in premium locations such as Mont'Kiara, Damansara Heights, Kuala Lumpur city centre and selected parts of Iskandar Malaysia in Johor, the research house said in a sector note on Monday.
“High-end properties are selling like hot cakes” and average selling prices for some new launches appear to be “holding up well” — indicating developers’ confidence in the luxury market, RHB Research said.
UEM Sunrise Bhd’s (KL:UEMS) The Minh project and Pavilion Square by privately held Pavilion Group were nearly sold out. In Iskandar Malaysia, Eco World Development Group Bhd’s (KL:ECOWLD) upcoming Chateau II launch in Eco Botanic was overbooked two-to-three times.
Foreigners could make up at least 20% of the buyers for some of the projects that could attract interests from Singapore, China and Taiwan, according to RHB Research.
Overall, property sales remained resilient in the first quarter even as geopolitical conflict in the Middle East escalated sharply at the end of February, RHB Research said, and kept the sector on an "overweight" call.
“We do not expect developers to decrease their sales targets upon the release of results in May,” RHB Research said. “Some may wait and see before taking any action while the majority of developers should go ahead with their launches as planned.”
Developers, by nature, have better flexibility than other industries to tweak product specifications, materials and pricing to protect margins from cost pressures, the research house noted.
The house’s top picks for the sector are Sime Darby Property Bhd (KL:SIMEPROP) and Eco World.
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