By THE STAR
KUALA LUMPUR: Property sales is expected to remain weak over the next few months due to weak housebuyer sentiment, and then gradually recover in the second half of 2017.
CIMB Research said sales would recover after the incoming supply peaks in the second half of the year.
The 14% year-to-date rally in the KL Property Index appear to have priced in the potential recovery, it said in a note on Wednesday.
The research house, which maintained its Neutral stance on the sector, said buying opportunities may emerge in 2H17 if property share prices fall in the next few months as a result of the anticipated weak property sales.
“The developers appear to be optimistic about the property market conditions in 2017
relative to those in 2016, judging from their sales targets for this year.
“However, we think property sales could remain weak in the next few months.
“The unexciting wage growth prospects and inflationary pressures could continue to weigh on homebuyer sentiment in the near term, in our view,” it said.
CIMB Research said despite the challenging near-term outlook, it believes new property sales recovery may gain strength in late-2017.
It said the incoming supply of residential property will peak by mid-2017 as many developers have held back their launches since 2015.
“Also, the bulk of the property projects that were launched before 2015 would be completed by the end of this year.
“The peaking of incoming supply could mark the beginning of easing competition between developers and existing homeowners for property sales,” it added.
– Malaysia Property News