The Dawn of a Promising Upsurge
Key Takeaways :
▪️ Residential sales grew by +31.2% YoY in 1Q24, meanwhile the ASP was relatively stable with +1.9% YoY growth. While High rental costs may spur a surge in home ownership, the increase in home ownership rates to 84.5% in FY23 indicated a shift as consumers become more interested in property.
▪️ From the recurring income metric, developers experienced an average growth of 11.5% YoY in 1Q24. The absence of new malls in the past two years has positively impacted the recovery of occupancy rates, especially in Jakarta, with the average occupancy rate of the Greater Jakarta area (Jabodetabek) was at 70.3% in 1Q24.
▪️ We maintained a Overweight rating for the property sector, with BSDE, CTRA and SMRA are our top picks. The hawkish narrative is also another factor to drag on properties, as 70% of home purchases are derived from mortgages.
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