Positive Outlook for Malaysian Property Sector Amid Lower Residential Overhang

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2024 Positive Outlook For Malaysia Property Sector

Positive property outlook in Malaysia with reduced overhang and MM2H program changes. Johor’s JSSEZ developments anticipated for H1 2024 focus.

KUALA LUMPUR, 5th Jan 2024 – MIDF Research expresses optimism about the property sector, citing enhanced fundamentals and reduced residential overhang, alleviating worries of an oversupply. In their latest research note, the investment bank anticipates an unchanged overnight policy rate (OPR), providing ongoing support for property demand. 

MIDF Research highlights the positive reception of eased requirements for the Malaysia My Second Home (MM2H) program, expecting increased applications and heightened property demand as a result.

In the recent MM2H updates, the minimum age requirement was lowered to 30 from 35, expanding accessibility, and financial criteria were eased. MIDF Research suggests that states popular among foreigners, like Johor, Kuala Lumpur, and Penang, may experience increased demand. 

Overall, it observed a 5.2% YoY rise in loan applications for property acquisitions, totaling RM560.6 billion over the first 11 months of 2023, signalling a consistent sector recovery.

MIDF Research projects robust property demand in 2024, supported by an improving property outlook. Meanwhile, Maybank Investment Bank (Maybank IB) underscores the importance of Johor’s developments, particularly the Johor-Singapore Special Economic Zone (JSSEZ), expected to be a key focus in H1 2024. 

Maybank IB awaits details on JSSEZ, speculating on Sedenak, encompassing 2,950 hectares (7,290 acres) owned by Johor Corp, as a potential location. They suggest the extensive landbank and relatively lower land costs could attract foreign investments, akin to the success of Iskandar Puteri launched in 2007.

Maybank IB rationalizes the placement of JSSEZ in Sedenak, anticipating it as a catalyst for new growth in Iskandar Malaysia, fostering job opportunities. With existing data centers, Sedenak is poised to spur growth in the surrounding areas. 

Notably, Khazanah Malaysia Bhd’s land ownership in Iskandar Puteri, through 70%-owned UEM Sunrise, increases the likelihood of the special economic zone being situated there. Despite higher land costs, the mature and proximity advantages of Iskandar Puteri to Singapore make it resilient for property demand, supported by local and foreign investments. 

The identification of Forest City as a special financial zone and a potential high-speed rail station in Iskandar Puteri further sustains buying interest in the region.

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