ACCORDING to data released by Bank Negara Malaysia (BNM), total loan application for purchase of property normalised in August 2025 by easing -2.7% month-on-month (mom) to RM60.8 bil after strong growth of +19.2% mom in July 2025.
On a yearly basis, total loan application grew by +6.9% year-on-year (yoy) in Aug 2025, snapping three consecutive year-on-year declines in May to July.
MBSB Research thinks that the recovery in buying interest was partly attributed to the overnight policy rate (OPR) cut in July 2025.
That brought the total loan application higher at RM435.2 bil (+1.9%yoy) in the eight months of calendar year 2025 (8MCY25).
“The higher loan application is in line with our expectation of stronger buying interest on properties in 2025,” said MBSB.
Besides, MBSB thinks that the implementation of BUDI95 which is largely unaffecting the affordability of homebuyers is slight positive to the property sector.
Meanwhile, performance of KL Property Index was positive in quarter three calendar year 2025 (3QCY25), inched up +6.2% and outperformed KLCI’s gains of +5.2%.
The gains in KL Property Index were largely underpinned by optimism from OPR cut by 25bps in July 2025 as property sector is one of the beneficiaries of lower interest rate.
With gains in KL Property Index, valuations of property companies are returning to long-term mean.
We see the renewed buying interest on property stocks was underpinned by catalysts from Johor-Singapore SEZ and RTS link. Going forward, performance of KL Property Index is expected to sustain by the prospect of inflow of foreign funds as MBSB Research views that we may see foreign funds returning to our shore with the US rate cuts.
We remain positive on the outlook for property sector as buying interest on property is stronger while catalysts such as JS-SEZ and RTS link will continue to serve as catalysts to the sector. —Oct 15, 2025
Main image: The Star
