RHB Investment Bank has maintained its “Overweight” recommendation on the local property sector, saying valuations have become attractive following a recent sell-off driven by rising bond yields and political uncertainty.
The sector is trading at a 60% discount to its revised net asset value (RNAV), compared with a 51% discount in May, with much of the negative sentiment already priced in.
The research house identified Eco World (ECW) as its top pick, citing its strong sales performance, execution track record and exposure to Iskandar Malaysia.
Budget 2027 is expected to support property demand through an extension of stamp duty exemptions for first-time homebuyers until Dec 31, 2030.
Buyers purchasing residential properties priced up to RM500,000 will receive full exemptions on stamp duty for loan agreements and transfer instruments, while the portion above RM500,000 for properties priced up to RM750,000 will qualify for a 50% exemption.
Developers focused on affordable and mid-range homes, including Matrix Concepts, Mah Sing and LBS Bina, are expected to benefit most.
RHB also sees opportunities in Johor ahead of the planned December launch of the Johor-Singapore Special Economic Zone masterplan.
Developers including UEM Sunrise, Eco World, Sunway, Mah Sing and KSL could benefit from investment inflows and demand for industrial properties.
Despite a one-to-two-month delay in the Johor-Singapore RTS Link’s public opening to February 2027, the investment outlook for Iskandar Malaysia remains intact.
RHB believes Budget 2027 measures, including higher minimum wages, increased personal tax relief, lower income tax rates for selected brackets and cash assistance, could support consumer sentiment and offset some impact from potentially higher mortgage costs.
Although overall property demand has softened, particularly in the mass-market segment, industrial, high-end residential and commercial investment properties remain resilient.
RHB also noted that major developers have diversified into recurring-income businesses, such as healthcare, construction, investment properties and data centres, improving earnings resilience.
With sector valuations now attractive, RHB expects a potential recovery, particularly among developers with strong sales and earnings visibility.
Eco World’s property sales reached RM4.05bil in the first 10 months of 2026, exceeding its RM4bil full-year target, while its upcoming Eco Business Park 8 development is expected to support future growth.—Oct 12, 2026
Main image: The Economic Times
