- It was reported in the media over the weekend that the
government has raised the maximum household salary requirement for the PR1MA
housing scheme to RM7,500/month from the
previous RM6,000/month. Although pricing range was not mentioned it was
highlighted the units will sold be at discounted prices through a transparent
balloting method.
- We understand types of units will depend on location with
units will range from studio apartments to landed properties. There will also
be moratorium of 10 years before house owners are allowed to sell their units.
- PR1MA’s first housing scheme would be launched in Seremban
on Saturday where there will be mix of landed and high-rise properties. This is
three-phase programme, with the first phase to comprise about 1,200 houses due
in 2015. This would be PR1MA’s first project since the gazetting of the PR1MA
Act in January.
- While this will provide some boost for transaction volume
we believe there will be little impact to property companies under our coverage
as they don’t have exposures in RM200k-RM400k segment. However this could
change if the government proposes in the Budget 2013 that the low cost housing
requirement to be replaced with medium cost units to address the big mismatch
of demand and supply in medium cost housing as
speculated by the market.
- Given Budget 2013 is an ‘election budget’, we believe
focus would very much centre around affordable housing with a more robust
scheme is expected. We gather that PR1MA
& My First Home Scheme (MFHS) have not taken off in a desirable
manner with reports of high rejection rates – quite a significant number of
applicants were ineligible and only slightly over a third of the applicants
were approved by financial institutions.
- Recall that My First Home Scheme (MFHS) and PR1MA were
introduced last year to enable young working adults with salary RM3,000/month
and RM6,000/month to obtain up to 100%-105% financing to buy their first homes
costing up to RM220k/unit and RM400k/unit respectively, with a repayment period
of up to 30 years.
- We maintain our OVERWEIGHT stance on the property sector
because current valuations are depressed property stocks are trading at deep
discount of 40%-50% to NAVs, sales guidance are very much intact and we think
there will be a return of pent-up demand in properties. We expect the market to
re-rate established township players such as IJM Land (FV:RM3.80/share) and Mah
Sing (FV: RM3.60/share) with Bandar
Rimbayu and Southville City as key developments to drive sales.
- Meanwhile we have HOLD recommendations on Sunway Bhd,
Bandar Raya Developments and SP Setia.
Source: AmeSecurities
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