Kuala lumpur: Real estate remains a reliable hedge against escalating inflationary pressures driven by energy price increases linked to the West Asia conflict, according to RHB Investment Bank Bhd (RHB IB).

According to BERNAMA News Agency, RHB IB highlighted in a research note that the real estate sector's strength is further bolstered by expectations of rising costs in building materials, labor, and land, which are anticipated to elevate overall development expenses, including increased replacement costs for new properties. Despite market concerns regarding potential interest rate hikes, RHB IB expressed confidence that a stronger ringgit will help maintain a stable interest rate environment.

RHB IB also noted that it does not foresee developers lowering their sales targets when results are released in May. While some developers may adopt a cautious approach, the majority are expected to proceed with their planned project launches. Demand in the real estate sector remains strong, with resilient sales observed in the first quarter of 2026, despite the geopolitical tensions between the US and Iran that began in late February and could potentially impact the sector.

The investment bank further mentioned that developers do not anticipate significant impacts on their profit margins for the first quarter of 2026. However, if the geopolitical situation persists, future quarters might see some effects on profitability. Despite these challenges, developers are continuing with asset monetization initiatives, and value-unlocking efforts from the previous quarter are seen as crucial catalysts for the sector. Companies engaging in similar monetization activities are expected to experience comparable positive trends.