Stamp duty exemption will have minimal impact on overall real estate market, says RHB IB

KUALA LUMPUR (July 18): RHB Investment Bank Research (RHB IB) said the stamp duty exemption announced by the government will have minimal impact on the overall real estate market.

In a note released on Monday (July 18th), the research house said persistent market headwinds, such as rising inflationary pressures and a weaker ringgit, continue to dampen market sentiment.

“Coupled with expectations of higher interest rates ahead, potential buyers may put off buying big-ticket items for the next six months.

“We maintain our ‘neutral’ call for the sector.

“Top picks: Matrix Concepts Holdings Bhd and IOI Properties Group Bhd,” he said.

RHB IB said that Mah Sing Group Bhd, LBS Bina Group Bhd, Matrix Concepts Holdings Bhd and Tambun Indah Land Bhd will benefit from the incentive, as these developers have a relatively high exposure (over 60%) to real estate products whose price is less than RM500,000.

He said the potential benefits for bigger players might not be so great, as mid-range products make up a smaller percentage of their overall portfolio.

“While demand-side incentives are now being reintroduced, cost pressures remain a big concern for developers as building material prices remain at high levels, while labor shortage issues still need to be resolved.

“As a result, we anticipate a potential downside risk to developer revenue over the coming quarters,” he said.