PETALING JAYA: Following a steady performance this year, the Malaysian property market is expected to resume its stable growth momentum into 2025.
PPC International Sdn Bhd managing director Datuk Siders Sittampalam said the outlook for 2025 remains “cautiously optimistic.”
“The affordable housing segment will likely continue to dominate, as first-time buyers benefit from government incentives and targeted financing programmes.”
To boost the property market’s growth momentum next year, Siders said stakeholders will need to focus on enhancing policy frameworks, supporting affordable housing initiatives and leveraging strategic infrastructure projects to stimulate regional growth.
“With sustained demand in well-connected urban centres and industrial hotspots, Malaysia’s property market is poised for gradual but stable recovery in the years ahead.”
Siders noted that key opportunities include strategic infrastructure projects, such as the East Coast Rail Link, which promises to rejuvenate previously overlooked areas and unlock new investment opportunities.
PPC International MD Datuk Siders Sittampalam
“While policy-based enablers such as adjustments to the Malaysia My Second Home programme could further stimulate the market to some extent.
“Nevertheless, economic uncertainties and affordability concerns pose ongoing challenges,” he said.
Meanwhile, down south, Olive Property Consultants chief executive officer (CEO) Samuel Tan said there has been increased confidence in Johor’s property market, following the slew of announcements and initiatives taken by the federal and state governments.
“Johor’s ability to attract foreign direct investments, especially in the data centre, logistics, electrical and electronics and renewable energy segments are signs of improving economic performance.
“All these are followed by job creation and more business opportunities,” he told StarBiz.
Tan noted that property transactions, in particular the residential sub-sector, has increased substantially both in terms of volume and price since borders reopened in April 2022.
“After nearly a decade of downturn, the market has finally recovered.
“Some of the reasons for the robust residential market are pent-up demand post-Covid-19; high accommodation cost in Singapore; high additional buyer stamp duty imposed for foreigners; and anticipation of the positive impact from catalytic initiatives like the Special Financial Zone at Forest City, the Johor-Singapore Special Economic Zone and the Rapid Transit System (RTS).”
Tan said other catalysts include government initiatives such as the stamp duty exemption for first time house buyers, interest rate deduction for loan on purchase of residential houses for a specific period, as well as the Madani deposit for those who require initial funds for house purchases.
“The fear of inflation is also causing people to invest in properties as a hedge against rising costs such as land, building construction, labour and compliance costs.
“Higher disposable incomes will be translated into property investment,” he said.
On another note, Tan said Johor has consistently recorded high overhang volumes.
“Although property experts have said that the overhang situation is improving, recent reports by the National Property Information Centre (Napic) still show high numbers of new developments.”
Overhang refers to those completed properties that remained unsold for nine months after launch.
Olive Tree Property Consultants chief executive officer Samuel Tan.
Tan, however, noted that developers have been managing to clear quite a lot of unsold stocks over the past few years.
“We noticed that the sales of new developments are also good. This is especially so for high-rise projects located near the Johor Baru city centre and RTS terminal.
“As such, we believe there is definitely an increased demand for residential properties from both Malaysians (especially those working in Singapore) and Singaporeans and other foreigners.”
Having said that, Tan said the constant supply of properties, especially high-rise development with high plot ratio, is a concern.
“Developers must be discerning enough not to launch their projects if the anticipated take-up rates are uncertain.
“Nevertheless, new project launches, including service apartments in popular locations that are rightly priced, have been absorbed by the market,” he said.
According to Napic data, the third quarter of financial year 2024 (3Q24) saw a slight increase in both volume and value of housing transactions, with 70,520 units recorded (3Q23: 68,561 units) worth RM28.74bil versus RM28.36bil a year ago.
Overall, the property market performance improved with the number and transaction value rising by 3.1% and 0.3%, respectively.
This comprises 112,305 transactions valued at RM57.31bil, compared with 108,993 transactions worth RM57.14bil in 3Q23.
Rahim & Co International Sdn Bhd real estate agency CEO Siva Shanker said he expects positive growth for the property market in 2025, emphasising however that it will be marginal.
“There will be some normalisation in the property market and the growth will be organic, going forward. Gone are the days when we used to see the sector rising or falling by 20% to 30%.
“However, this is good, as it is more sustainable. It’s better to have slow and steady growth for long term prospects,” he said.
On the outlook of property stocks going forward, Maybank Investment Bank Research said 2025 is set to be eventful with corporate exercises like the listing of Sunway Bhd
’s healthcare business, as well as investment properties of S P Setia Bhd and WCT Holdings Bhd, to name a few.
“Thematic drivers like data centre-related investments and land sales are expected to sustain interests in property stocks, which have the relevant exposure.
“Sime Darby Property Bhd recently secured another 20-year lease with Google for its Elmina Business Park (77 acres), while Eco World Development Group Bhd is pursuing more data centre deals in its Selangor and Kulai (Johor) industrial parks.”
Additionally, the research house also highlighted that S P Setia is expected to finalise its Tanjung Kupang industrial park joint venture by the first half of 2025.
As the year comes to a close, Siders said the Malaysian property market in 2024 exhibited an adjustment phase, gradually moving towards a more stable and positive trajectory, influenced by evolving economic conditions and buyer preferences.
“The residential property sector continued to dominate transactions, bolstered by demand in urban centres like Kuala Lumpur, Selangor, Johor and Penang.
“Demand for affordable homes, particularly those priced below RM500,000, was robust, as they catered to first-time buyers and owner-occupiers.”
Siders said many developers adopted a cautious approach, with new launches concentrating on smaller-scale phases.
“This strategy contributed to a slight improvement in the residential overhang, reflecting healthier absorption rates.”
Siders believes landed homes are expected to remain a top preference for homebuyers.
“This is provided they are offered on an affordable and competitive price point, whilst properties near public transportation hubs attracted interest, particularly for rental purposes, given the growing demand from young professionals and working adults.”
Separately, Siders said the industrial property market stood out as a resilient segment as it has been since post-Covid-19, driven by high-tech manufacturing, eCommerce and logistics.
“Strategic locations such as Johor and Klang Valley gained traction due to initiatives like the Johor-Singapore Special Economic Zone and the ongoing growth of high-quality industrial parks.
“Investors remained interested in niche products such as sustainable logistics spaces and integrated industrial developments, reinforcing this sector as a stable pillar of growth.”
