KUALA LUMPUR: MALAYSIA'S real estate sector is poised for further improvements this year, bolstered by robust growth in the construction industry and increased foreign direct investments (FDIs).
The market continued to register a positive performance in 2024, chalking up increases in both volume as well as value, said Henry Butcher Malaysia chief operating officer Tang Chee Meng.
Malaysia's total property transaction value surpassed RM105 billion in the first half of 2024 (1H2024), with 198,906 transactions recorded, marking the highest growth in value and volume over the past five years, according to the 2024 First Half Property Market Report by the National Property Information Centre (Napic).
Tang said that areas set to benefit from proposed major infrastructure projects, such as new highways and LRT/MRT networks, are expected to see heightened development activity.
"These growth areas will attract both investors and homebuyers," he said during the company's briefing on "Navigating the property market in 2025.".
Tang said that established locations offering easy access to social, educational, shopping, and recreational amenities, popular among local homebuyers and expatriate tenants, will remain appealing to investors.
In Johor, Tang emphasised that the Johor-Singapore Special Economic Zone (JS-SEZ) would be a transformative initiative, significantly boosting the residential, commercial, and industrial sectors.
In Penang, the upcoming Mutiara LRT line, connecting Georgetown city centre to Bayan Lepas and Seberang Perai, is expected to enhance public transportation and spur development along the route, particularly near the stations. Additionally, the upgrading and expansion of Penang International Airport will bolster both the leisure and commercial sectors.
Tang also predicted increased development activity in Selangor, driven by state policies such as the Integrated Development Region in South Selangor (IDRISS), Smart Selangor Action Plan (SSAP), Selangor Agenda for Green Economy (SAGE), and Rancangan Selangor Pertama (RS-1).
On the residential market, Tang noted that landed properties, particularly single- and two-storey terraced houses, would remain the top choice for Malaysians in 2025.
"These are the preferred house types for most Malaysians. We also think high-rise apartments in the affordable price range in major towns and cities will continue to perform well, especially in the more popular or high-growth locations.
"Smaller-sized units, which will bring down the absolute price of the property, and niche high-end projects in good locations where supply is limited will also do better. Furthermore, projects with innovative concepts, designs, and themes that set them apart from the usual fare in the market will also be viewed positively," he said.
Tang highlighted that the sustained positive performance of the residential property market has prompted developers to acquire more land and plan additional project launches.
Noting that a number of the leading developers have made land bank acquisitions over the past two to three years, it is not unrealistic to expect these developers to be launching more new projects over the next few years, he said.
"For 2025, we are optimistic that the residential property market will likely be stable and continue to enjoy positive growth. House prices could go up as developers try to recoup higher construction costs, although the sensitive market and cautious consumer sentiments would place a ceiling on how much developers will be able to raise prices," Tang said.
He also noted that the increase in the minimum wage from RM1,500 to RM1,700 per month, effective February 1, 2025, along with a more than 13 per cent salary hike for civil servants starting December 2024, could stimulate consumer spending.
This improved financial capacity, coupled with the Overnight Policy Rate (OPR) maintaining at 3 per cent since May 2023, may also encourage some individuals to consider purchasing their own homes, he said.