Kuala Lumpur: MIDF Amanah Investment Bank Bhd has expressed optimism about Malaysia’s property sector, anticipating sustained buying interest throughout the year.

According to BERNAMA News Agency, the investment bank noted that property sales are generally stronger, which is expected to support earnings growth moving forward.

The bank highlighted that the sales and service tax (SST) impact on property companies would be minimal since residential buildings are exempt from the 6.0 percent SST. Although there is an SST on commercial and industrial buildings, the bank expects a limited impact on earnings due to the strong demand for industrial assets. Citing Bank Negara Malaysia, the bank reported that total loan applications have increased consecutively over three months on a year-on-year basis, indicating robust buying demand.

For the first quarter of 2025, MIDF Amanah found that property companies’ earnings were generally in line with expectations, driven by higher progress billing of ongoing projects. New property sales are expected to pick up in the second half of 2025, with an acceleration of project launches anticipated. The bank noted that most developers are targeting higher sales in 2025, as market conditions remain favorable with stable property demand.

MIDF Amanah’s top picks in the sector include Mah Sing Group Bhd, Matrix Concepts Holdings Bhd, and UOA Development Bhd, with target prices of RM1.37, RM2.05, and RM1.98, respectively. The bank remains positive about Mah Sing due to stable new sales prospects underpinned by launches of affordable residential projects. A similar outlook applies to Eco World, supported by growing contributions from its industrial property development segment.

The bank also sees better earnings prospects for UOA Development, backed by profit recognition from ongoing projects in Klang Valley and income from investment properties. UOA Development’s recent entry into the Johor property market is expected to further support future sales growth. Additionally, the dividend yield of UOA Development is considered attractive at 5.5 percent, with its balance sheet remaining healthy due to a net cash position.