Real Estate Seen As Inflation Hedge Amid Energy Price Pressures -- RHB IB

KUALA LUMPUR, May 11 (Bernama) --  Real estate remains a good hedge against rising inflationary pressures driven by energy price increases stemming from the West Asia conflict, said RHB Investment Bank Bhd (RHB IB).

In a research note, RHB IB said this is further supported by expectations that higher building materials, labour, and land costs will continue to push up overall development costs, including higher replacement costs for new properties.

“While the market may be concerned over the possibility of an interest rate hike, we believe the stronger ringgit should support a stable interest rate environment,” it added.

RHB IB said it does not expect developers to revise down their sales targets upon the release of results in May.

“Some may wait and see before taking any action, while the majority of developers should go ahead with their launches, as planned,” it said.

It still sees demand in the sector, with sales remaining resilient in the first quarter of 2026, despite the US-Iran geopolitical conflict, which started in late February and may have affected the sector.

Developers do not see a major impact on 1Q 2026 margins, although profit margins in the next few quarters may be affected if it is prolonged, it added.

Despite market headwinds, RHB IB said developers are continuing with their asset monetisation exercises, with value-unlocking efforts from the previous quarter remaining an important sector catalyst.

“We believe companies that have similar monetisation exercises should experience the same trend,” it added.

-- BERNAMA