KUALA LUMPUR: The Malaysian real estate sector’s growth is expected to continue this year despite the impending increase in Sales and Service Tax (SST) rate to 8% from 6% from March 1, according to international property consultants Rahim & Co International Sdn Bhd.
Rahim & Co director of research and strategic planning Sulaiman Akhmadi Mohd Saheh said the market’s impressive performance in 2022 carried forward into 2023 is anticipated to extend into 2024, albeit at a slower rate.
“The sector will continue to grow (this year), particularly in areas with strong existing infrastructure, strategic locations, and sufficient population and workplace amenities, as well as schools for children,” he told reporters yesterday at the company’s property market prospect for 2024 briefing and the release of its annual publication, Property Market Review 2023/2024.
Sulaiman said the higher SST rate will cause a knee-jerk reaction, but pointed out that it is not a sudden increase from 0% to 8%, but rather a hike from 6%.
“The expectation is for a knee-jerk reaction, but in the long term or towards the second half of the year, it will normalise again, and the market will be good to grow. Short-term changes may appear significant, but as the market becomes accustomed to it, it will normalise,” he added.
According to the publication, on the property market outlook for 2024, opportunities are seen for the landed homes segment as they remain the preferred choice as evidenced in the successful sales of projects offering units at affordable prices.
For high-rise developments, the value-added presence of a transit station in transit-oriented developments will continue to attract both homebuyers and investors. The home purchasing trend has steadily shifted towards these high-rise units as demand from younger buyers for complete offerings and facilities within an integrated development gains traction.
The publication stated that despite concerns about high prices, residential demand will always remain and will see continued shifts in terms of house prices, design and locality. The challenge of homeownership has also fostered growth in the rental market which is becoming a mainstream option for city dwellers.
In short, the moderating growth pace of 2023 is likely to spill over into 2024. The market is also recalibrating itself with the injection of long-delayed new offerings.
Policy-based enablers such as the revised MM2H programme and perhaps the once-debated Residential Tenancy Act would be key to seeing more traffic for both the foreign buyers’ market and the rental segment of the property market.
It said that as the property market is heterogeneous, opportunities are seen in several key areas – some of which are long-known hotspots that had dwindled down but recently invigorated through new catalytic infrastructures and policies.
Across the different regions in the country, ongoing infrastructure projects and proposed plans including the Pan-Borneo Highway, East Coast Rail Link and the revisited Kuala Lumpur-Singapore High-Speed-Rail are poised to strengthen local economic growth and opportunities.
