PETALING JAYA: The local property sector is expected to regain momentum in the second half of 2025 (2H25) driven by falling interest rates, resilient mass-market demand and foreign direct investment-led activity in industrial and transit-oriented developments, says UOB Kay Hian (UOBKH) Research.
In a recent note, the research house maintained an “overweight” rating on the sector, projecting a 10.3% year-on-year (y-o-y) growth in revenue and 7.4% earnings growth in 2025. It said the 25-basis-point cut in the overnight policy rate (OPR) would support the earnings outlook.
UOBKH Research estimated that the rate cut could lift developers’ 2026 earnings modestly, with S P Setia Bhd potentially gaining 2%, Sunway Bhd
by 1% and Eco World Development Group Bhd (EcoWorld Malaysia) by 0.5%, based on their respective floating-rate debt exposure of 40% to 60%.
Monthly repayments for floating-rate mortgages could also drop by 3.4% based on a RM500,000 loan, enhancing buyer affordability.
It noted that developers were also ramping up launches in Johor, particularly around the Bukit Chagar rapid transit system station location, with upcoming projects including Sunway’s Soho units in Sunway Majestic and Mah Sing Group Bhd’s M Grand Minori.
“Overall, the increase in 2H25 launches should be well absorbed by a robust and less-speculative demand, supported by a tangible infrastructure progress enhancing cross-border connectivity, and a growing industrial activity backed by the Singapore and Johor governments under the Johor-Singapore Special Economic Zone or JS-SEZ,” said UOBKH Research.
The mass-market housing segment remains resilient, with developers like Mah Sing, Matrix Concepts Holdings Bhd, Lagenda Properties Bhd and EcoWorld Malaysia offering homes priced below RM700,000.
UOBKH Research noted that this segment benefits from structural drivers such as first-time homebuyers and minimum wage hikes.
On the industrial front, the research house sees continued demand for land in Johor despite delays in some data centre transactions. It expects IOI Properties Bhd to conclude a 300-acre sale in Kulai by the third quarter, adding that “we see a pocket of opportunities in the sector, especially among companies exposed to the Iskandar 2.0 theme”.