Malaysia Property: Riding on Investment Renaissance

• Sustained uptrend to continue in 2025 on healthy economic outlook and favorable supply-demand dynamics
• Budget 2025 tax relief for first-time homebuyers to provide additional fillip for sector growth momentum
• Strong positive spillover effects from Malaysia's investment upcycle

Going from strength to strength.

Malaysia's property sector remains on a steady growth trajectory with 9M24 total property transactions rising by 6% y-o-y, on track to achieve its fourth consecutive year of growth since 2020. In fact, 3Q24 property volume (+3% y-o-y) marked the highest since 2012 with healthy growth observed across the sub-sectors, in tandem with the robust 3Q24 GDP growth of 5.3%. This is also corroborated by firm property loans demand as loans for residential property and non-residential property grew 7.3% and 7.0% respectively in Sep 2024, outperforming the pre-pandemic levels.

Supply overhang is no longer a concern.

3Q24 residential overhang came in at 21,968 units (-3% q-o-q, -13% y-o-y), the lowest since 2016. Improvements are also seen in the overhang for serviced apartment which dipped 5% q-o-q and 9% y-o-y in 3Q24. We belive that solid labour market conditions with record labour force participation and low unemployment will continue to sustain the property sector recovery, paving the way for developers to have more launches to meet the strong demand.

Tax relief for first homebuyer after 14 years.

Budget 2025 has introduced income tax relief of up to 7k/year for three consecutive years for first home purchases priced up to RM750k. We believe this could be a strong impetus to encourage homeownership among young Malaysians and first-time buyers considering that the incentive was last introduced in 2010 when Malaysia's economy was recovering from the 2009 global financial crisis.  

Benfitting from burgeoning investment activities.

Malaysia's progressive national policies for the digital economy and renewable energy as a fast-rising hub for regional cloud infrastructure. This has spurred strong land price appreciation in Johor and Selangor, benefittting industrial landowners in strategic locations. This structural trend is likely to remain supportive of Malaysia's overall property sector in 2025.

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