Latest news with #OPR
Barnama
6 hours ago
- Business
- Barnama
Research Firms Lower Inflation Forecasts To 1.5-1.8 Pct In 2025
BUSINESS KUALA LUMPUR, July 22 (Bernama) -- Research firms have revised their forecasts for Malaysia's headline inflation in 2025, lowering it to 1.5 per cent to 1.8 per cent. MBSB Investment Bank Bhd has adjusted its 2025 inflation projection to 1.8 per cent, considering the sustained moderate inflation reading and weaker cost pressures in recent months as well as the delay in the RON95 subsidy adjustments, which may lead to a more gradual pickup in inflation than initially forecast. 'We adjust our inflation forecast lower in light of the latest policy developments,' it said. Citing Communications Minister Datuk Fahmi Fadzil, it said there is a slight delay in the implementation of targeted subsidies for RON95 petrol which stems from the necessity for a comprehensive review and meticulous fine-tuning of the policy mechanism to ensure the rollout will not adversely affect the public. 'Overall, we project that higher price pressures will predominantly be driven by supply-side factors, particularly those arising from the expanded sales and service tax (SST) implementation. 'Complementing this, additional demand-side pressures could also grow following the recent Overnight Policy Rate (OPR) adjustment, which may encourage larger consumer expenditures on the back of resilient labour market conditions, with healthy employment and wage growth,' it added. It said that despite the potential rise in demand, MBSB Investment Bank expects the OPR will be kept at 2.75 per cent for the rest of year as overall inflation remains under control. Meanwhile, OCBC senior ASEAN economist Lavanya Venkateswaran said the outlook for headline consumer price index (CPI) remains relatively subdued for the remainder of the year. 'We are reducing our 2025 CPI forecast to 1.5 per cent year-on-year (y-o-y) from 2.0 per cent previously based on low inflation of 1.4 per cent in the first half of 2025 (1H 2025) and reduced prospects of RON95 rationalisation.
New Straits Times
a day ago
- Business
- New Straits Times
Status quo of low OPR until June 2026: Expert
KUALA LUMPUR: The current low interest rate environment, following Bank Negara Malaysia's move to cut the Overnight Policy Rate (OPR) by 25 basis points, may remain at least until the first half of next year, an expert said. CIMB Bank Bhd chief investment office Ng Boon Hoa said Bank Negara appears to be taking a cautious approach in supporting the nation's economic growth. This is particularly in light of the risks from a potential global slowdown and the uncertainty surrounding Malaysia's yet-to-be-finalised tariff negotiations, he added. "We expect Bank Negara to maintain the current interest rate at 2.75 per cent at least until mid-2026. "It is rather difficult to make precise projections for 2027 and beyond, as external factors are constantly changing," he said during the presentation of CIMB's Asean Market Outlook in conjunction with the bank's Asean media day here today. According to Ng, the recent rate cut was a preemptive measure to absorb near-term uncertainties in economic growth. "If the current rate successfully spurs growth, Bank Negara is likely to remain comfortable with this level. Rate hikes would only be considered if there is significant strengthening in growth, possibly in 2027 or 2028, and even then, likely only once or twice," he said. Commenting on foreign fund flows, Ng said the domestic bond market is currently benefiting from these inflows, which in turn enhances liquidity in the financial system and supports lower borrowing costs. However, he cautioned that excessive inflows could risk contributing to inflationary pressures over the longer term and would require close monitoring by the monetary authorities. "Foreign funds can flow in and out quickly. We need to be cautious. The ringgit has shown some strengthening thanks to these inflows, but currency movements can change abruptly," he said. He pointed to the one per cent depreciation of the ringgit against the US dollar over the 20-day period since the end of June as an example of the uncertainties facing the local market.
New Straits Times
3 days ago
- Business
- New Straits Times
Rate cut to spur moderate demand in property sector, say analysts
KUALA LUMPUR: The cut in the Overnight Policy Rate (OPR) by Bank Negara Malaysia (BNM) will spur moderate demand for properties in general in the second half (2H) of this year while demand in the high-end segment will continue to be robust, analysts say. They contend that the lower benchmark lending rate, together with infrastructure growth and incentives for developers, will maintain the property market's resilience with stable price trends amid a cautiously optimistic outlook. JLL Malaysia managing director Jamie Tan told Bernama that stable economic conditions, wealth preservation strategies and attractive incentives have encouraged upgraders and investors to remain active despite the cautious sentiment in the broader market. Nevertheless, analysts contend that it is an opportune time for buyers. Although price softening is seen in some high-end urban pockets, they believe overall sentiment has improved, particularly in infrastructure-connected zones and prime city areas. Nevertheless, real estate experts said they notice the rate cut has led to a noticeable increase in property viewings and home loan inquiries, which could boost buying sentiment especially in the mid-range segment. Luxury Homes Defy Downtrend Despite a general slowdown in the overall real estate market in the first quarter (1Q) of this year, the high-end segment demonstrated greater resilience. This was evident by the 5.6 per cent year-on-year increase in transactions for properties priced above RM1 million, according to the National Property Information Centre (Napic). While the overall volume and value of property transactions declined by 6.2 per cent and 8.9 per cent respectively, demand for luxury homes in Kuala Lumpur, Penang, and Johor Bahru remained firm, driven by affluent buyers seeking high-quality developments in prime locations. Prices Holding Steady in Urban Centres Tan said residential prices across Malaysia's major urban centres remained steady, with modest gains recorded across key segments. In the Klang Valley, serviced apartments and condominiums saw price increases of between 1.8 and 2.3 per cent, while double-storey terrace home prices rose 1.4 per cent. "These figures reflect sustained demand and market stabilisation following the post-pandemic recovery," he said, adding that balanced new supply and consistent buyer demand have supported price stability. IQI co-founder and chief executive officer Kashif Ansari expressed optimism the current market overhang at about 4.8 months of sales volume is still relatively healthy, especially compared with countries like the United States (US), where overhang rates hover around 10 months. Affordability Challenges for Mass Market Kashif said in contrast, the sub-RM500,000 market faced more significant challenges. Transaction volumes and values in this price segment declined, reflecting affordability pressures and cautious spending among mass-market buyers. "While many buyers are financially stable, factors like rising living costs and stagnant wages continue to weigh on sentiment," he said. To address affordability gaps, Kashif said developers and policymakers must focus on boosting supply in the RM200,000 to RM500,000 range, where demand is high but product availability remains limited. Improved Overhang Situation, But Strategic Supply Needed Residential overhang rates, while improving, still warrant attention. According to JLL, overhang rates stood at 23 per cent in Selangor and Johor and 19 per cent in Kuala Lumpur as of the second quarter (2Q) of 2025, marking improvements from pandemic-era peaks of 63 per cent in 2020-2021. "Not all unsold stock is equal. Properties with strong locations, connectivity and design features continue to attract buyers, while poorly located or overbuilt units struggle," Tan said. Competition among developers remains intense, with many offering incentives to boost sales without officially cutting prices. These include price rebates, renovation packages, legal fee absorption and even lifestyle perks like travel vouchers. OPR Cut Sparks Renewed Buyer Interest BNM's OPR cut to 2.75 per cent on July 10, after about two years of no change, has boosted buyer sentiment. While the OPR rate remained unchanged at 3.0 per cent since May 2023, the latest cut is seen as an opportune time for homebuyers to enter the market. Real estate experts reported a noticeable increase in property viewings and home loan inquiries following the rate cut. "This reduction improves affordability. A borrower financing a RM500,000 home could save around RM66 per month, adding up to RM23,000 over a 30-year loan. That's a tangible incentive," said Kashif. In combination with developer incentives, the rate cut is expected to revive activity particularly in the mid-range market, where value-for-money is key. However, he said that the property market remains sensitive to broader economic conditions. External shocks such as geopolitical tensions, policy instability, or global economic slowdowns could dampen momentum. Infrastructure as a Growth Catalyst On the other hand, infrastructure continues to play a key role in driving property values. Homes located near public transport networks such as Mass Rapid Transit (MRT) and Light Rail Transit (LRT) stations, consistently outperform the broader market. Citing a study by Universiti Pendidikan Sultan Idris, Kashif said that properties within 400 metres of MRT stations on the Sungai Buloh-Kajang (SBK) line sold at a 9.5 per cent premium post-completion, about RM99,900 more than the citywide average. Tan, meanwhile, also cited transit-oriented developments, which would benefit from long-term desirability, making it attractive even in softer market conditions. "Connectivity drives footfall, rental demand and capital values. Investors perceive infrastructure-rich areas as lower-risk and higher-return zones," said Tan. Johor's Transformation Boosting Values Johor is emerging as a standout market, driven by the Johor-Singapore Special Economic Zone (JS-SEZ) and the upcoming Rapid Transit System (RTS) Link. These mega-projects are spurring development interest and price growth. As of 2Q 2025, serviced apartment prices in strategic areas such as Bukit Chagar and the Customs, Immigration and Quarantine complex have surged by up to 20.4 per cent. New projects are fetching prices of RM1,500 per sq ft and above – levels previously limited to Kuala Lumpur's Golden Triangle. "Johor's cross-border connectivity is a powerful magnet for both developers and investors," Tan said. Towards Holistic, Livable Development Looking forward, analysts emphasised the importance of holistic urban planning and inclusive housing strategies. "Developers must align their projects with real community needs, not just profit margins," said Tan. This includes better coordination with local councils, sustainable design and ensuring access to amenities, public transport and green spaces. Kashif echoed the call, adding that a stable property market should prioritise accessibility, housing quality, and long-term livability, not just price performance. Regulatory clarity and streamlined approval processes are also key to maintaining investor confidence. Tan urged more consistent guidelines from federal and local authorities to avoid delays and uncertainty. He lamented that "frequent policy changes discourage long-term planning and add costs to development." To spur affordable housing, both experts recommended refining the Home Ownership Campaign, introducing tax incentives for affordable housing developers and avoiding haphazard launches that could flood the market. He cautioned that without proper planning, "we risk another overhang situation." Positive Overall Outlook for Property Sector While Malaysia's property market faces challenges in affordability and oversupply in some segments, the overall outlook remains positive. Stable economic conditions, supportive monetary policy, infrastructure development and a responsive developer ecosystem are helping to maintain resilience. With targeted policy support and careful supply alignment, 2Q 2025 could see renewed momentum, especially in the mid- and high-end segments that deliver both value and connectivity.
Barnama
3 days ago
- Business
- Barnama
Rate Cut To Spur Moderate Demand In Property Sector, Say Analysts
They contend that the lower benchmark lending rate, together with infrastructure growth and incentives for developers, will maintain the property market's resilience with stable price trends amid a cautiously optimistic outlook. KUALA LUMPUR, July 20 (Bernama) -- The cut in the Overnight Policy Rate (OPR) by Bank Negara Malaysia (BNM) will spur moderate demand for properties in general in the second half (2H) of this year while demand in the high-end segment will continue to be robust, analysts say. Although price softening is seen in some high-end urban pockets, they believe overall sentiment has improved, particularly in infrastructure-connected zones and prime city areas. Nevertheless, analysts contend that it is an opportune time for buyers. JLL Malaysia managing director Jamie Tan told Bernama that stable economic conditions, wealth preservation strategies and attractive incentives have encouraged upgraders and investors to remain active despite the cautious sentiment in the broader market. Nevertheless, real estate experts said they notice the rate cut has led to a noticeable increase in property viewings and home loan inquiries, which could boost buying sentiment especially in the mid-range segment. Despite a general slowdown in the overall real estate market in the first quarter (1Q) of this year, the high-end segment demonstrated greater resilience. This was evident by the 5.6 per cent year-on-year increase in transactions for properties priced above RM1 million, according to the National Property Information Centre (Napic). While the overall volume and value of property transactions declined by 6.2 per cent and 8.9 per cent respectively, demand for luxury homes in Kuala Lumpur, Penang, and Johor Bahru remained firm, driven by affluent buyers seeking high-quality developments in prime locations. Prices Holding Steady in Urban Centres Tan said residential prices across Malaysia's major urban centres remained steady, with modest gains recorded across key segments. In the Klang Valley, serviced apartments and condominiums saw price increases of between 1.8 and 2.3 per cent, while double-storey terrace home prices rose 1.4 per cent. 'These figures reflect sustained demand and market stabilisation following the post-pandemic recovery,' he said, adding that balanced new supply and consistent buyer demand have supported price stability. IQI co-founder and chief executive officer Kashif Ansari expressed optimism the current market overhang at about 4.8 months of sales volume is still relatively healthy, especially compared with countries like the United States (US), where overhang rates hover around 10 months. Affordability Challenges for Mass Market Kashif said in contrast, the sub-RM500,000 market faced more significant challenges. Transaction volumes and values in this price segment declined, reflecting affordability pressures and cautious spending among mass-market buyers. 'While many buyers are financially stable, factors like rising living costs and stagnant wages continue to weigh on sentiment,' he said. To address affordability gaps, Kashif said developers and policymakers must focus on boosting supply in the RM200,000 to RM500,000 range, where demand is high but product availability remains limited. Improved Overhang Situation, But Strategic Supply Needed Residential overhang rates, while improving, still warrant attention. According to JLL, overhang rates stood at 23 per cent in Selangor and Johor and 19 per cent in Kuala Lumpur as of the second quarter (2Q) of 2025, marking improvements from pandemic-era peaks of 63 per cent in 2020-2021. 'Not all unsold stock is equal. Properties with strong locations, connectivity and design features continue to attract buyers, while poorly located or overbuilt units struggle,' Tan said. Competition among developers remains intense, with many offering incentives to boost sales without officially cutting prices. These include price rebates, renovation packages, legal fee absorption and even lifestyle perks like travel vouchers. OPR Cut Sparks Renewed Buyer Interest BNM's OPR cut to 2.75 per cent on July 10, after about two years of no change, has boosted buyer sentiment. While the OPR rate remained unchanged at 3.0 per cent since May 2023, the latest cut is seen as an opportune time for homebuyers to enter the market. Real estate experts reported a noticeable increase in property viewings and home loan inquiries following the rate cut. 'This reduction improves affordability. A borrower financing a RM500,000 home could save around RM66 per month, adding up to RM23,000 over a 30-year loan. That's a tangible incentive,' said Kashif. In combination with developer incentives, the rate cut is expected to revive activity particularly in the mid-range market, where value-for-money is key. However, he said that the property market remains sensitive to broader economic conditions. External shocks such as geopolitical tensions, policy instability, or global economic slowdowns could dampen momentum. Infrastructure as a Growth Catalyst On the other hand, infrastructure continues to play a key role in driving property values. Homes located near public transport networks such as Mass Rapid Transit (MRT) and Light Rail Transit (LRT) stations, consistently outperform the broader market. Citing a study by Universiti Pendidikan Sultan Idris, Kashif said that properties within 400 metres of MRT stations on the Sungai Buloh-Kajang (SBK) line sold at a 9.5 per cent premium post-completion, about RM99,900 more than the citywide average. Tan, meanwhile, also cited transit-oriented developments, which would benefit from long-term desirability, making it attractive even in softer market conditions. 'Connectivity drives footfall, rental demand and capital values. Investors perceive infrastructure-rich areas as lower-risk and higher-return zones,' said Tan. Johor's Transformation Boosting Values Johor is emerging as a standout market, driven by the Johor-Singapore Special Economic Zone (JS-SEZ) and the upcoming Rapid Transit System (RTS) Link. These mega-projects are spurring development interest and price growth. As of 2Q 2025, serviced apartment prices in strategic areas such as Bukit Chagar and the Customs, Immigration and Quarantine complex have surged by up to 20.4 per cent. New projects are fetching prices of RM1,500 per sq ft and above -- levels previously limited to Kuala Lumpur's Golden Triangle. 'Johor's cross-border connectivity is a powerful magnet for both developers and investors,' Tan said. Towards Holistic, Livable Development Looking forward, analysts emphasised the importance of holistic urban planning and inclusive housing strategies. 'Developers must align their projects with real community needs, not just profit margins,' said Tan. This includes better coordination with local councils, sustainable design and ensuring access to amenities, public transport and green spaces. Kashif echoed the call, adding that a stable property market should prioritise accessibility, housing quality, and long-term livability, not just price performance. Regulatory clarity and streamlined approval processes are also key to maintaining investor confidence. Tan urged more consistent guidelines from federal and local authorities to avoid delays and uncertainty. He lamented that 'frequent policy changes discourage long-term planning and add costs to development.' To spur affordable housing, both experts recommended refining the Home Ownership Campaign, introducing tax incentives for affordable housing developers and avoiding haphazard launches that could flood the market. He cautioned that without proper planning, 'we risk another overhang situation.' Positive Overall Outlook for Property Sector While Malaysia's property market faces challenges in affordability and oversupply in some segments, the overall outlook remains positive. Stable economic conditions, supportive monetary policy, infrastructure development and a responsive developer ecosystem are helping to maintain resilience. With targeted policy support and careful supply alignment, 2Q 2025 could see renewed momentum, especially in the mid- and high-end segments that deliver both value and connectivity. -- BERNAMA BERNAMA provides up-to-date authentic and comprehensive news and information which are disseminated via BERNAMA Wires; BERNAMA TV on Astro 502, unifi TV 631 and MYTV 121 channels and BERNAMA Radio on FM93.9 (Klang Valley), FM107.5 (Johor Bahru), FM107.9 (Kota Kinabalu) and FM100.9 (Kuching) frequencies. Follow us on social media : Facebook : @bernamaofficial, @bernamatv, @bernamaradio Twitter : @ @BernamaTV, @bernamaradio Instagram : @bernamaofficial, @bernamatvofficial, @bernamaradioofficial TikTok : @bernamaofficial
The Sun
3 days ago
- Business
- The Sun
OPR rate cut to boost Malaysia property demand, say analysts
KUALA LUMPUR: The recent reduction in Malaysia's Overnight Policy Rate (OPR) is expected to stimulate moderate property demand in the second half of 2025, particularly in the mid-range segment, while the high-end market remains strong, analysts say. Bank Negara Malaysia's decision to lower the OPR to 2.75 per cent on July 10 has already led to increased property viewings and home loan inquiries. 'This reduction improves affordability. A borrower financing a RM500,000 home could save around RM66 per month, adding up to RM23,000 over a 30-year loan,' said Kashif Ansari, co-founder and CEO of IQI. Despite a general slowdown in the property market, luxury homes priced above RM1 million saw a 5.6 per cent year-on-year increase in transactions, according to the National Property Information Centre (Napic). Demand remains firm in Kuala Lumpur, Penang, and Johor Bahru, driven by affluent buyers seeking prime locations. Residential prices in major urban centres have remained stable, with serviced apartments and condominiums in the Klang Valley recording price increases of 1.8 to 2.3 per cent. 'These figures reflect sustained demand and market stabilisation following the post-pandemic recovery,' said Jamie Tan, managing director of JLL Malaysia. However, the sub-RM500,000 segment faces affordability challenges, with transaction volumes declining due to rising living costs and stagnant wages. Developers and policymakers are urged to focus on boosting supply in the RM200,000 to RM500,000 range, where demand is high but availability is limited. Infrastructure continues to drive property values, with homes near MRT and LRT stations commanding premium prices. Properties within 400 metres of MRT stations on the Sungai Buloh-Kajang line sold at a 9.5 per cent premium post-completion, according to a study by Universiti Pendidikan Sultan Idris. Johor's property market is also thriving, supported by the Johor-Singapore Special Economic Zone (JS-SEZ) and the upcoming Rapid Transit System (RTS) Link. Serviced apartment prices in strategic areas like Bukit Chagar have surged by up to 20.4 per cent. Analysts stress the need for holistic urban planning and consistent policies to sustain market growth. 'Developers must align projects with real community needs, not just profit margins,' said Tan. - Bernama
