Juwai IQI: Cross-border property investment in M’sia to rise 40%

PETALING JAYA: Cross-border property investment in Malaysia is expected to increase 40% this year compared with 2021 levels, thanks to the reopening of the Causeway and Singapore border crossing which will contribute to the resurgent economy and fortunes of Malaysia, according to real estate technology group Juwai IQI Group.

The group expects Malaysian expatriates living in Singapore and Singapore nationals to increase their property acquisitions in Malaysia, especially in Johor and Kuala Lumpur. Investment should continue to climb in 2023.

Juwai IQI group co-founder and CEO Kashif Ansari (pix) said the border reopening will have important impacts on the Malaysian economy. It will lead to a complete resumption of pre-pandemic trade and travel between the countries, make it possible for Malaysians to seek opportunities in Singapore, and for Singaporeans to seek opportunities in Malaysia.

“The reopening marks the beginning of a new era of cross-border real estate investment in both directions,“ said Kashif.

In 2022, Singaporeans looking to invest in Malaysia will be driven by the strong Singapore dollar and the perception that the Malaysian market is nearing the bottom of the cycle. They expect prices and activity to rise in the coming years.

Besides, the high property prices in Singapore will drive buyers to seek alternatives in Malaysia.

“The pandemic has fuelled housing demand and reduced the supply of housing on the market in Singapore. The result has been new highs for private residential real estate prices,” said Kashif.

Overall, Singapore’s private home prices rose by 10.6% in 2021. Despite the rising prices, number of transactions had increased 68% compared to 2020, the group said.

Besides, the Singapore dollar is close to a five-year high against the ringgit, trading at RM3.10 to S$1, significantly higher than it was at the start of the pandemic in February 2020, when the dollar fell to RM2.98. The rate represents a 4-5% increase in purchasing power for buyers holding Singapore dollars.

Furthermore, the Malaysian real estate market offers excellent affordability at the moment. While Malaysia’s real estate market did surprisingly well during the pandemic, Ministry of Finance data shows that transactions were nonetheless lower than in prior years.

“In H1’20, total residential transaction value dropped more than 26% below the level of H1’19. However, in H1’21, the total transaction value was still below the 2019 level. In H2’21, the prices dropped 1.2% but transactions remained in line with 2019 levels.

“Nevertheless, the property market could be at the beginning of a new up cycle with fewer sales and less new construction, combined with rising economic optimism in the country.

“As employment, household income, and GDP all increase in 2022 and beyond, we expect the home market to also perform well,” said Kashif.