KUALA LUMPUR (Dec 18): Analysts have maintained an “overweight” rating on the property sector, anticipating it to be a primary beneficiary of the revamped Malaysia My Second Home (MM2H) programme, with increased domestic activities driven by a surge in infrastructure projects and investments.

RHB Investment Bank Research said it is upbeat on the new MM2H programme as the age and income requirements are now more reasonable, while the tiered system provides greater flexibility to foreign participants.

In a sector update on Monday, the research house said Iskandar Malaysia stands to benefit the most as the region is currently seeing an influx of investments and catalysts from infrastructure developments.

Besides that, it said the Kuala Lumpur City Centre and Mont Kiara in the Klang Valley, as well as Penang may also benefit, being preferred locations among foreigners.

"The revision of the MM2H programme is timely, especially as Iskandar Malaysia is currently seeing a boost in demand, driven by an influx of investments as well as the upcoming completion of the Johor Bahru-Singapore Rapid Transit System (RTS), slated for end-2026. The friendlier policy will help to encourage the potential relocation of skilled workers, which has been the government’s objective to spur growth in Johor," it said. 

Last Friday, Tourism, Arts and Culture Minister Datuk Seri Tiong King Sing had announced new and more relaxed conditions for the MM2H programme, intended to simplify the application process, which had previously been criticised as burdensome. 

The programme is now divided into three categories: Platinum, Gold and Silver. The new conditions will be on a year-long trial period with the criteria and conditions possibly streamlined later in accordance with current needs. 

Under the new MM2H programme, the age requirement has been lowered to 30 and above (vs 35 and above previously) with the programme also extended to dependents aged between 21 and 34 who are not working or married in Malaysia.

Parents or parents-in-law are also eligible as dependents. Previously, dependents only included spouses, children aged under 21 and any children with disabilities.

RHB IB said UEM Sunrise Bhd, Sunway Bhd and Eastern & Oriental Bhd are key beneficiaries under the new MM2H programme.

“We reiterate our overweight call on the sector, as government policies, investment flow, infrastructure developments and the US Federal Reserve’s signal of a potential rate cut next year are favourable to stimulate demand for property,” it said.

TA Securities also maintained its "overweight" stance on the property sector, saying the latest MM2H programme shows promising improvements compared to the rebranded MM2H programme introduced in 2021, as it widens opportunities for younger individuals who were previously ineligible.

Moreover, it said the eligibility of attaining permanent resident status in the Platinum tier is bound to attract those eyeing relocation to Malaysia.

"Overall, we believe the latest conditions set for the MM2H programme hold the potential to boost foreign real estate investments and potentially address overhang issues in the country. 

"The more favourable MM2H terms are expected to rekindle interest among tourists and foreign investors in Malaysia. In our opinion, this adjustment could attract more foreigners to our shores, positively impacting the real estate market," TA Securities said in a note. 

Its top picks for the sector are Sime Darby Property Bhd and Sunway Bhd. 

Meanwhile, Hong Leong Investment Bank Research (HLIB Research) maintained its "neutral" rating on the property sector, highlighting that with clarity over the relaxed conditions under the revamped MM2H programme, developers now have a better picture and visibility of the market and the sector could potentially see more launches in the high-end residential segment.

HLIB Research sees the revamped MM2H programme being positive for most developers, including Sunway, OSK Holdings Bhd, IOI Properties Group Bhd, Sime Darby Property, UEM Sunrise Bhd, S P Setia Bhd, Mah Sing Group Bhd and Eastern & Oriental Bhd. 

"Additionally, the MM2H programme should also have spillover economic benefits to tourism and healthcare, benefiting in particular Sunway through its senior living, healthcare and hospitality businesses. 

"Having said that, we also cautioned increased competition from neighbouring countries like Thailand and Indonesia which had in recent years launched similar programmes," it added. 

HLIB Research's top picks for the sector include Sunway, OSK, Sime Darby Property and IOI Properties.