Is the right time of rising interest in property stocks a sign that the worst in the economy and the local property market is behind us? A number of research houses and property analysts are beginning to think so.
For one, looking into 2010, local research unit banker research institute believes that inflation or asset reflation could gradually emerge as a catalyst for the greater local stock market performance, given the existence of ample liquidity with prolonged low interest rates, prospects of a further weakening in the US dollar as well as rising commodity prices.
Under such circumstances, it points out that sectors that could benefit are oil and gas, plantation and property. According to the research unit, this is particularly true for the local property market, which it sees as being in the early stages of a recovery cycle and likely to gain further strength in 2010, given the ample liquidity, prolonged low interest rates, rising consumer confidence and a recovering economy. According to banker research, this is reflected in improving developers’ property sales since 2Q09, thanks to their aggressive marketing strategies (such as the 5-95 scheme) and improving property demand.