MBSB IB: High Oil Prices May Weigh On Property Sector

KUALA LUMPUR, March 18 (Bernama) -- Malaysia’s property sector could face a mild downturn if elevated oil prices persist, as higher fuel costs drive up transportation expenses, leading to increased construction costs for developers, said MBSB Investment Bank Bhd (MBSB IB).

In a research note, the investment bank said that while generally property companies in Malaysia do not have exposure to the geopolitical tension and military conflicts in West Asia, the resulting spike in oil prices is expected to have a knock-on effect on the property sector.

“The surge in oil prices is expected to increase the cost of living for people and reduce disposable incomes. That will in turn lower homebuyers' affordability and affect property buying interest,” it said.

MBSB IB expects the rising property overhang to be a growing concern to the sector, while the oil price hike might derail the growth of property demand.

“However, we remain positive on property sector as the near-term prospect for property demand should remain healthy.

“The Johor Bahru–Singapore Rapid Transit System (RTS) and Johor-Singapore Special Economic Zone (JS-SEZ) will remain the catalysts for the sector,” it added.

Meanwhile, the investment bank expects loan applications to be weaker in February 2026 due to festive season.

“Nevertheless, we maintain our expectation of marginal growth on buying interest in 2026,” it said.

-- BERNAMA