Insights
Malaysia Property: Clear skies ahead
21 March 2024
- Madani Economy to underpin healthy growth for Malaysia’s property market in 2024
- Sustained sector recovery is expected given the improved supply-demand dynamics
- New infrastructure projects to uplift property market recovery
Full steam ahead
Overall property transactions in Malaysia grew 2.5% in 2023 after a whopping 30% rebound in 2022 due to post-pandemic recovery. Importantly, healthy growth was recorded across the key property subsectors, namely residential, commercial and industrial. This marks the best performance for the property market since 2012 when Malaysia experienced a property bubble. The strong recovery has also been reflected in the steady increase in property prices which rose 3.2% in 2023, compared to 3.5% in 2022.
Supply overhang is firmly behind us
4Q23 residential overhang came in at 25,816 units (+2% q-o-q, -7% y-o-y), the lowest since 2017. In addition, marked improvement was seen in serviced apartment overhang (classified under commercial) which dipped 6% q-o-q and 13% y-o-y in 4Q23. We believe that the much-improved supply-demand dynamics and the favourable economic outlook under the Madani Economy Framework will continue to sustain the property sector recovery.
Solid sales performance from developers
Bursa-listed large developers generally achieved strong property sales performance in 2023 with some recorded guidance-beating performance. Landed properties continue to receive robust demand while affordably-priced high-rise properties benefit from keen interest from first-time home buyers. Given the robust employment market with record high labour participation and better income growth prospects in 2024, we believe the positive growth trajectory will continue in 2024.
Rail infrastructure projects as catalysts
Several planned major rail infrastructure projects such as MRT3, Penang LRT, Johor LRT and KL-SG HSR are expected to serve as a strong catalyst for Malaysia’s property sector. Taking cue from the spillover effects of the on-going JB-SG RTS, we believe Malaysia’s property sector will continue to do well in the near-to-medium term.