- Sustained uptrend in 2025 on healthy economic outlook and favourable supply-demand dynamics.
- Robust labour market and tax relief for first-time homebuyers supportive of sector growth momentum
- Strong positive spillover effects from Malaysia's investment upcycle
Unabated growth
Malaysia's property sector ended the year of 2024 on a high note with total property transaction rising by 5.4% y-o-y , marking its fourth successive year of growth since 2020. For 4Q24, property volume grew 3% y-o-y, largely driven by the strong growth trajectory in the business segment, in tandem with the robust 4Q24 GDP growth of 5%. This is also corroborated by firm property loans demand as loans for residential property and non-residential property grew 6.9% and 8.1% respectively in Dec 2024, reflecting the healthy economic outlook.
Favourable supply-demand dynamics
4Q24 residential overhang came in at 23,149 units (+5% q-o-q, -10% y-o-y), a level that was last seen in 2017. Meanwhile, improvement was also seen in the overhang for serviced apartment which dipped 3% q-o-q and 6% y-o-y in 4Q24, recovering to the pre-pandemic level. All these positive results were achieved despite more aggressive property launches in 2024 (+34% y-o-y vs +4% in 2023), signalling significantly improved property demand.
Tailwinds in 2025
Budget 2025 has introduced income tax relief of up to 7k/year for three consecutive years for first home purchase priced up to RM750k. We believe this could be a strong impetus to encourage homeownership among young Malaysians and first-time buyers considering that the incentive was last introduced in 2010 when Malaysia's economy was recovering from the 2009 global financial crisis. In addition, the solid labour market conditions with record labour force participation and low unemployment will continue to sustain the property sector recovery.
Benefitting from burgeoning investment activities
Malaysia's progressive national policies for digital economy and renewable energy have led to record high investments, as the country has emerged as a fast-rising hub for regional cloud infrastructure. This has spurred strong land price appreciation in Johor and Selangor, benefitting industrial landowners in strategic locations. This structural trend is likely to remain supportive of Malaysia's overall property sector in 2025.
