MANAGING DIRECTOR, 

VPC ALLIANCE (MALAYSIA) SDN BHD

Although the political climate is now stable, our economy is impacted by domestic headwinds such as inflation, rising labour costs, the weakening Malaysian ringgit, weaker exports, lower tourist arrivals, a drop in domestic manufacturing activities and lower foreign direct investments. On the global front, there is still uncertainty in the global economy and continuing geopolitical conflicts.

With the sluggish property market, developers were generally cautious about launching projects. Hence, we saw fewer property launches in 2023. The pent-up demand by homebuyers post-pandemic did not materialise.

In 2023, there was a trend of developers strengthening and consolidating their positions by aggressively acquiring new land bank, innovating to come up with new property products to stay ahead and seeking new growth opportunities in rent-to-own schemes, workers and students’ accommodation, medical tourism projects, developing data centres and introducing buy-with-tenant programmes. As a result, there are opportunities for investors and homebuyers to invest in these subsectors in 2024.

In 2024, the main drivers of the property market will be the development of affordable housing, landed residential properties with environmental, social and governance (ESG) initiatives, and modern logistic and warehouse facilities.

With the announcement of the Johor-Singapore Special Economic Zone (SEZ) and the Johor Bahru-Singapore Rapid Transit System (RTS) Link, which is currently under construction, south Johor will be the next hotspot destination for property development.

We don’t expect the property market to perform significantly better in 2024 than it did in 2023. Rather, recovery will be slow and gradual, but it will still be a buyers’ market. The pace will also depend on internal and external factors. These internal factors will be based on improved productivity, increased wage packages and controlling inflation, while external factors will depend on the recovery of the global economy (particularly China’s economic recovery as it is Malaysia’s largest trading partner), the easing of geopolitical conflicts and stabilised global inflation.

DIRECTOR OF RESEARCH, 

RAHIM & CO INTERNATIONAL SDN BHD

Property market activities normalised in 2023 after a strong rebound in 2022 but that was coherent with a post-pandemic recovery that surpassed pre-2020 performance. The pace of growth seen from 2022 and 2023 (up to 3Q) was higher than in 2018 and 2019.

The residential sector in 2023, as expected, dominated the transaction market but its percentage share was more stabilised as commercial and industrial markets saw an increase in activity. As developers took a more cautious pace with regard to new launches by way of smaller-scale phases, overhang numbers showed a slight but consistent improvement over the three quarters of 2023.

The outlook for 2024 remains cautiously optimistic as external factors continue to dampen investment confidence. Sales performance, too, showed improvements in established areas with strong owner-occupier demand. The commercial sector saw minor improvement but the coming online of past delayed projects will add pressure. For the industrial sector, interest remains in newer integrated and managed industrial parks with specific niches rather than generic products. Overall, the moderated pace of recovery in 2023 is likely to spill over into 2024 as the market recalibrates itself. Policy-based enablers such as a revised MM2H that should be redesigned to be more investor-friendly and, hopefully, a revisit of the proposed Residential Tenancy Act will give the market a boost.

Concerns among investors and homebuyers cover both the disposable income capacity and monthly financial commitments angle, on top of the lurking uncertainties raised by the lingering global economic situation emanating from war conflicts and trade disruptions. Domestically, the OPR movement remains an influential factor in affordability and although it is being maintained at 3% for 2H2023, any further increase will have a significant impact on homebuyers.

In 2024, landed homes should remain the top preferred choice for homebuyers at the right price tag. For high-rise developments, the value-added presence of a train station in close proximity gives an advantage to investors looking to capitalise on the growing rental market, especially among public transport users living within transit-oriented development areas. The industrial sector continues to be the stable pillar as interest holds strong for Malaysia as the current choice for the Southeast Asia region.

Additionally, long-known hotspots that had dwindled in interest have recently been invigorated through new catalytic infrastructure and policies. Proposed projects and master plans are underway to strengthen the industrial presence in the northern region with new industrial parks developed and current ones expanded.

As the progress bar advances for the East Coast Rail Link, the east coast and central region are set to get a boost with potential new spots opening along the route. In the south, the designation of Forest City as an international financial hub offers hope of pulling in more foreign investors to our shores while continuing to attract Singaporean and other international investors.

GROUP MANAGING DIRECTOR, PA INTERNATIONAL 

PROPERTY CONSULTANTS SDN BHD

Overall, the domestic property market was stable in 2023. The total transaction volume remained slightly over 293,000 units for 1Q2022 to 3Q2022 (293,115 units) and 1Q2023 to 3Q2023 (293,095 units), while total transaction value increased 8.8% from RM130.99 billion (1Q2022 to 3Q2022) to RM142.514 billion (1Q2023 to 3Q2023). It is interesting to see that despite the challenges of Covid-19, both transactions in terms of volume and value have surpassed pre-pandemic levels, indicating sustained demand. Transaction values across the subsectors showed upward movements. As for the primary market, we saw active new launches in the residential segment during the second half of 2023. Developments in good locations and with the right pricing were well received.

Moving into 2024, the property market is expected to be largely driven by the economy, which has a moderate growth rate at present. The gradual reduction of subsidies and the increase in the SST to 8% will put upward pressure on the cost of living, which in turn will impact property market activities.

Moving forward, there will be fewer new launches, but these will focus on certain geographical areas — near public transportation and upcoming highways/expressways — or property types with attractive sales packages.

The residential market is expected to undergo further stabilisation supported by growth, albeit at a slower rate. The rental market will see strong growth with more people gravitating towards renting due to the higher cost of living.

The expansion of e-commerce, manufacturing growth and demand for data centres will drive growth and investments in the industrial and logistic subsectors in 2024. Also, more advanced industrial facilities such as sufficient logistics and warehousing spaces, ESG criteria, GreenRE and a wide road system will be in demand.

Besides the higher SST from March 1, 2024, other headwinds include the rising cost of building materials, which will push property prices upwards; and the rise in non-performing residential loans, which may lead to more auctions in the market.

As for opportunities, homebuyers should take advantage of the current stamp duty reduction before the expiration of the incentive. Properties near proposed or completed MRT/LRT lines or RTS as well as upcoming highways will continue to be popular. The landed residential sector is expected to remain resilient with stable growth, especially for properties with sustainable and green environments.

Warehouses, logistics and data centres will continue their hot streak in 2024, particularly in Klang and the south of Selangor, Penang, Kedah, Negeri Sembilan and Johor.

EXECUTIVE DIRECTOR, 

METRO HOMES REALTY BHD

The Malaysian property market faced significant challenges in 2023. The aftermath of the general election in 2022 and the state election in August 2023, combined with global economic uncertainties, played a major role in this downturn. Other factors include the US Federal Reserve’s interest rate hikes leading to the devaluation of the ringgit and the ongoing global recovery from Covid-19. Additionally, international conflicts, such as the Russia-Ukraine and Israel-Palestine wars, further exacerbated the situation.

Therefore, Malaysian banks have become increasingly selective about lending, contributing to a “perfect storm” in the property sector, characterised by high overhangs and a record number of foreclosure cases. However, the political landscape has stabilised, which might pave the way for economic progress in the upcoming years.

I anticipate a sluggish recovery for the property market in 2024, particularly in the first half of the year. Core issues, including low disposable income and a lack of foreign direct investment in the property sector, are likely to persist. The market is expected to be driven primarily by affordable housing (around RM300,000), while the high-end market remains stagnant due to ongoing uncertainties.

The new policy of the MM2H programme, once announced and implemented, may draw foreign investors’ attention to Malaysia. The country’s strategic location, peacefulness and rapid economic growth, coupled with the weak ringgit against stronger currencies, position Malaysian properties as attractive investments.

For investors, 2024 offers a window to secure valuable deals, reminiscent of the economic climate in 1997. Many corporations are likely to offload prime assets to mitigate loan exposures or to restructure existing loans.

However, with high interest rates expected to continue, a cautious approach is advised. Homebuyers should consider completed properties or public auction sales, avoiding new launches due to the risks of project abandonment and potentially compromised construction quality. Both investors and homebuyers need to be prepared for sustained high interest rates throughout 2024. Industrial property investors should be particularly cautious, given the anticipated increase in supply.

For 2024, promising opportunities lie in high-end residential properties and commercial sectors like office buildings and hotels, which are currently undervalued due to low occupancy rates and high interest pressures.

Geographically, Johor Bahru stands out, especially with the completion of the RTS Link in 2026 and the development of a new economic zone in collaboration with the Singapore government.

MANAGING DIRECTOR, 

LANDSERVE SDN BHD

In 2023, the domestic property market was resilient despite the numerous challenges due to uncertainties in the global and national economies. Nonetheless, the property market held up remarkably well.

The performance of the property market in 2024 will depend largely on the global and national economies. The government has secured foreign direct investments (FDIs) not only from China but also from other countries such as South Korea, Japan and Singapore. Meanwhile, the government has also passed a record-high 2024 budget of RM393.8 billion to boost public spending and revenue collection, and prioritise debt management.

Given the FDIs as well as the existing and new infrastructure and development projects to be rolled out under Budget 2024, such as Phase 1 of the Pan-Borneo Sabah Highway, 33 high-priority flood mitigation projects, Phase 2 of the Sarawak-Sabah Link Road, the revival of five stations on the LRT3 Line, mainly in Shah Alam and Klang, and the widening of the North-South Expressway from four to six lanes in Johor, our economy is projected to grow between 4% and 5% in 2024.

With these projects, there will be a lot of jobs to go around. When businesses, especially our small and medium enterprises, which form the backbone of our economy, and consumers in general are optimistic about improved earnings, job opportunities and income growth, we can then expect the recovery in the property market to accelerate.

However, there are a number of factors beyond our control, such as the rise of US interest rates and a global economic slowdown. Hence, homebuyers and investors will have to closely monitor the global economy and its impact on our national economy and property market.

Moreover, under Budget 2024, the diesel subsidy will be removed. There will also be an increase in service tax from 6% to 8%. Although this hike will not include food and telecommunications, it will increase the cost of doing business, which will then be passed on to consumers.

Therefore, should there be further interest hikes in the US or a rise in inflation leading Bank Negara to increase its OPR again in 2024 to mitigate capital outflows and inflationary pressures, we can then anticipate a negative impact on the property market.

We believe that in 2024, there will be opportunities for investors and homebuyers in every property sector, especially in areas that are impacted by existing and new catalytic projects.

EXECUTIVE DIRECTOR, KGV INTERNATIONAL PROPERTY 

CONSULTANTS (JOHOR) SDN BHD

The Johor Bahru property market has improved significantly since last year. Total transaction volume for all property types improved 72% on a y-o-y basis (1H2022 vs 1H2023) and 25% on a half-yearly basis (2H2022 vs 1H2023). Total transaction value for all property types improved 55% on a y-o-y basis (1H2022 vs 1H2023) and 16% on a half-yearly basis (2H2022 vs 1H2023).

The improvements are largely due to the border reopening in April 2023. Many Singapore-based Malaysians resorted to renting or buying properties in view of the “fast-and-furious” price and rental acceleration in the city state in recent years. In addition, other positive news like the stabilising political scene, increased FDI and the good progress of RTS construction have been attracting both institutional and individual investors to reconsider Johor’s property market.

In 2024, the Johor property market will continue to improve with interest in residential, hospitality and larger-scale integrated developments in strategic locations; for example, in the Johor Bahru city centre and Iskandar Puteri areas, which include Forest City and Medini City.

The industrial sector will continue to be in the spotlight. This is a continuation of what has been happening in the last few years.

Some headwinds to watch out for are the spread of geopolitical risks; for example, the Israel-Hamas war, Russia-Ukraine war, China-Taiwan conflict, and North-South Korea conflict; internal political risks such as attempts to change government through the “back door” and infighting of component parties; escalation of the US-China trade war; and persistent high interest rates which lead to more waves of inflation.

High-rise condominiums and serviced apartments in good locations are worth considering for first-time homebuyers. This is especially true in the case of resale units and developers with unsold units. Many of these high-rise properties are reasonably priced.

As mentioned earlier, the industrial sector will be in the limelight. Larger warehousing for logistics purposes will be popular as Johor positions itself as a logistics hub in Asean. Our port and air facilities are well known and their connectivity is a key positive factor. Of course, the land connectivity with Singapore is another plus factor.

CHIEF OPERATING OFFICER, 

HENRY BUTCHER REAL ESTATE SDN BHD

The property market continued its recovery from the pandemic but at a slower pace of growth, with the volume and value of transactions recording only a marginal increase in the first nine months of 2023 compared to the previous corresponding period. The residential market, which contributed the largest share of transactions, similarly recorded a marginal increase in both volume and value of transactions. Commercial property transactions registered a larger increase in terms of volume as well as value of transactions while the industrial sector recorded an increase in value but a decline in the volume of transactions. Shopping malls and purpose-built offices managed to register an improvement in occupancy rates as the situation recovered to pre-pandemic levels.

For 2024, we expect the property market to be stable, barring any negative developments locally as well as internationally that may have a drastic impact on the country’s economy. For the residential market, apartments priced around the RM500,000 level and below as well as landed residences will continue to attract interest while higher-priced residences costing in the millions — especially if they are not located in popular neighbourhoods — will struggle as foreign interest has not returned in a big way yet. Major infrastructure projects announced in Budget 2024 will provide a boost to the local residential and commercial markets.

Although the local political situation appears to have stabilised, conflicts in Ukraine and the Middle East will cast a shadow on Malaysia’s economic growth and the health of the property market. The recent diplomatic rapprochements between the world’s two largest economies could hopefully help bring more stability to the global economic front. The substantial increase in the supply of office space and retail malls over the past few years has heightened the challenge faced by these sectors.

In particular, the recent completion and opening of two large malls in KL have added a significant amount of retail space to the market, which is expected to reduce the footfall of other malls in the neighbourhood. Although demand for office space has shown some improvement, the looming completion of large office developments in the next few years will certainly put pressure on occupancy and rental rates. The weakened ringgit has also resulted in higher construction costs, which will either lead to developers increasing their selling prices or deferring new launches until the market improves.

Developers will continue to focus on affordable homes as well as landed residences. Areas that will be served by new major infrastructure projects will become more accessible and this will lead to more projects being undertaken by developers in those locations. Some of these projects include the LRT linking Penang island and the mainland, the RTS link connecting Johor Bahru and Singapore and the reinstatement of five previously-cancelled LRT stations in the Klang Valley — Tropicana, Raja Muda, Temasya, Bukit Raja and Bandar Botanic. These are growth areas that will be of interest to both investors and homebuyers.

MANAGING DIRECTOR, 

CBRE | WTW

Demand for office space has improved with leasing demand mainly driven by flight-to-quality, flexibility terms, rightsizing and ESG compliance. As organisations strive to achieve their sustainability objectives, the demand for green-rated buildings is estimated to rise. The large incoming supply will inevitably put pressure on occupancy rates in the short to medium term.

The industrial property market remained positive with a promising outlook, fuelled by the expansion of e-commerce, the growth of manufacturing activities and the influx of foreign direct investment. Initiatives have also been taken by the government to nurture industrial development such as the New Industrial Master Plan 2030, which aims to increase manufacturing’s value-added (GDP) to RM587.5 billion, while the Pelan Induk Industri Halal 2030 aims to increase the GDP contribution to 11% and expedite the issue of halal certification.

The government suggests designating the Pengerang Integrated Petroleum Complex in Johor as a centre for advancing the chemical and petrochemical industries by offering specialised tax rates or investment allowances.

The burgeoning e-commerce sector in Malaysia is set to continue its upward trajectory and, as this sector expands, there will be rising demand for warehousing space and vacant industrial land, with good access and infrastructure incorporating green features and higher building specifications.

The tourism industry is recovering, with tourist arrivals increasing by over 300% y-o-y in 1H2023 to 9.2 million, but still approximately 30% below 1H2019 levels of 13.4 million. The outlook for the tourism industry in Malaysia is positive, supported by the lifting of all Covid-related entry requirements and the more positive regional travel outlook coupled with Visit Malaysia Year 2026, for which the government is targeting 26.1 million tourist arrivals that will directly benefit the hotel market.

The residential market is also improving with overhang volume and value declining by 15% and 6% y-o-y respectively. The number of launches also increased by 12% within the first three months of 2023 compared with the previous corresponding period. The property sector will benefit from the relaxation of the MM2H requirements proposed during Budget 2024, which may compensate for the downside of the 4% flat rate for the stamp duty on MOT (memorandum of transfer) for foreigners. Besides that, the increase in allocation of the Skim Jaminan Kredit Perumahan from RM5 billion to RM10 billion is expected to benefit approximately 40,000 borrowers. Demand will continue to be driven by owner-occupiers.