In the wake of the prolonged Covid-19 outbreak, AmInvestment Bank has maintained a cautious approach on the property sector, reiterating its "neutral" rating.

The investment bank said in a research note on Monday that the sector's recovery slowed in the second half of 2021 (2H2021) as tighter containment measures from June onwards resulted in the closure of sales galleries and the halting of property development activities, delaying the recognition of progress billings.

However, it was highlighted that banks remained cautious in terms of residential property lending, as seen by the low approval rate of 36%, compared to 51%–53% during the rise from 2011 to 2014.

Consumer morale and employment prospects have remained subdued, according to AmInvestment Bank, against the backdrop of the prolonged pandemic, preventing customers from committing to the purchase of large-ticket products, such as a home. Due to the low base effect of 1H2020, new sales in 1H2021 increased by 2.3x year-on-year to RM8.6 billion, according to the investment bank.

AmInvestment Bank stated, “With the exception of the IOI Property Group, which exceeded its full-year financial year 2021 (FY21) sales target, most of the companies obtained 50 percent–75 percent of their FY21 sales target versus 13 per cent–51 per cent in the previous year.”

“Despite a full lockdown in June, quarter-on-quarter sales were still sustainable, thanks to the ongoing Home Ownership Campaign which accounted for more than 48 per cent of local sales, digital marketing initiatives and successful new launches.”

According to the most recent developer statements, property development has resumed, but at 60% of pre-pandemic capacity.

“We believe that the improving operations will continue to be supported by the companies’ rising vaccination rates, where at least 80 per cent of their employees have been vaccinated with a single dose and 10 per cent fully vaccinated,” Aminvestment Bank emphasised.

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