KUALA LUMPUR (June 18): Hong Leong Investment Bank (HLIB) research has upgraded its rating on the property sector to “overweight” from “neutral”.

In a sector update on Tuesday, the research house said its top picks in the sector include IOI Property Group Bhd (KL:IOIPG), OSK Holdings Bhd (KL:OSK), Sime Darby Property Bhd (KL:SIMEPROP), and Sunway Bhd (KL:SUNWAY).

This follows an announcement last week by the Ministry of Tourism, Arts and Culture (Motac) of an updated Malaysia My Second Home (MM2H) guideline.

HLIB said the latest guidelines are “more relaxed” than the 2021 iteration, says HLIB.

The updated MM2H guidelines included reduced requirements for fixed deposits, offshore income and liquid assets.

However, it also introduced a new requirement for house purchase, which is mandatory for MM2H holders.

The programme is now divided into three categories which details the minimum requirement for house purchase: Silver (RM600,000), Gold (RM1 million) and Platinum (RM2 million).

There is also an additional category called the special economic zone (SEZ) and special financial zone (SFZ), in which requirements are further softened (fixed deposit requirement of RM500,000 — reduced from RM1 million); no requirement on offshore income (versus RM40,000 per month previously).

Klang Valley developers

HLIB said that in the Klang Valley, most developers with exposure in this area are expected to benefit as many properties are priced above RM600,000.

“These developers include Mah Sing, Sunway, OSK, UEMS, SP Setia, IOIPG, and E&O.

Johor developers

“Aside from (the) Klang Valley, in Johor, HLIB expects that the lowering overhang of serviced apartments from Forest City will be an overall positive for the residential market in this region.

“This especially includes developments around the area by Sunway and UEM Sunrise Bhd (KL:UEMS),” it said.

HLIB said developers whose landbanks are in locations to be designated as SEZ should also benefit.

However, it said the new house purchase mandate may deter some potential applicants.

“From the property sector’s perspective, this is beneficial, as the relaxed conditions will attract a broader range of interests.

“While the house purchase requirement acts as an automatic filter, ensuring all MM2H applicants buy a property rather than renting,” it said.

Additionally, HLIB cautioned that the programme could face competition from similar ones in Thailand and Indonesia.