KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Key Highlights:
- Quarterly Increase: German residential real estate prices rose for the first time in nearly two years during the second quarter, driven by expectations of lower borrowing costs and a shortage of new housing.
- Price Gains: In the period ending June 30, prices for apartments increased by 2.4%, and single-family houses rose by 2%, compared with the previous quarter. Prices for multi-family houses saw a more significant increase of 4.4%.
Market Trends:
- Year-over-Year Comparison: Although property prices remain lower than the same period last year, the decline has been narrowing for the third consecutive quarter, according to the German Real Estate Index published by the Kiel Institute for the World Economy.
- Market Turnaround: "The turnaround in the real estate market has begun," said Kiel Institute researcher Jonas Zdrzalek. He attributed the stabilization to reduced uncertainty and the prospect of falling interest rates. The decline in new construction has also tightened supply, supporting price momentum.
Historical Context:
- Previous Slump: Last year, German residential real estate prices experienced the sharpest drop in 60 years due to high interest rates and material cost inflation, deterring potential buyers. Prices in Germany corrected more strongly than in other parts of the region, as a high percentage of people rent their homes, allowing them to avoid taking out expensive mortgages.
Monetary Policy Influence:
- European Central Bank: The European Central Bank began lowering borrowing costs in June. Investors anticipate further easing of monetary policy in September, following a pause last month.
Current Market Activity:
- Muted Transactions: Despite the price recovery, activity in Germany’s real estate market remains subdued. The number of residential property deals in the second quarter increased slightly but was still only around 60% of the average between 2019 and 2021, according to the Kiel Institute.
The recent rise in property prices across all segments indicates a potential stabilization of the German real estate market, supported by improving economic conditions and a constrained supply of new housing. However, market activity remains below pre-pandemic levels, suggesting cautious optimism among investors and buyers.
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