Kuala Lumpur: According to Hong Leong Investment Bank (HLIB), stable mortgage rates and tax reliefs are set to stimulate Malaysia’s property sector in 2025.
HLIB CEO Lee Jim Leng said the government initiative is expected to boost demand, while making home ownership accessible will help the market recover and contribute to long-term growth.
“The sector’s optimistic outlook is supported by the government’s initiatives outlined in Budget 2025. Specifically, there is a tax relief of up to RM7,000 for first-time homebuyers purchasing properties priced up to RM500,000 and up to RM5,000 for houses priced up to RM500,000. Between RM500,000 and RM750,000.
“These initiatives are expected to boost demand while supporting the market’s recovery,” Lee said in his opening speech today at the 18th Bursa-HLIB Stratum Focus Series titled “Property Sector: Entering a New Cycle”.
Additionally, he said, the current 3% overnight policy rate and stable mortgage rates in Malaysia bode well for demand in the property sector. “These low interest rates make ownership more affordable for those looking to invest in the near future,” he said.
Lee said the economy remains in a strong position, with stable employment growth rates and an expected gross domestic product (GDP) growth of 4.9% for Malaysia this year, according to HLIB estimates, which will provide for continued growth in the property sector. Provides correct conditions.
“At HLIB, we believe the economy remains in a strong position, driven by stable employment growth rates and projected GDP growth of 4.9% this year. These positive indicators provide the right conditions for sustained growth and a virtuous cycle of demand and investment that contributes to Malaysia’s broader economic growth.
“While these are promising signs, it is necessary for continued innovative strategies and collaboration within the industry to overcome the challenges,” he said.
Lee said affordability remains a key factor for the region. Higher salaries for civil servants and a higher minimum wage are expected to be introduced in 2025, he said.
“This incremental increase in disposable income is a very welcome factor in driving demand and enhancing affordability of properties across the country,” Lee said.
The value of Malaysia’s property transactions rose to RM105.65 billion in the first half of 2024, according to the National Property Information Centre. This represents a year-on-year increase of 23.8%, the highest in five years. Furthermore, the Kuala Lumpur Property Index is set to grow by 31.17% in 2024.
The residential overhang situation has also improved with a 12.3% decline in the quantity of unsold properties.
However, Li said rising cost of living, inflation pressures and high unsold inventory remain challenges to the market recovery. “Amidst our optimism, we believe challenges still remain. Tackling these challenges will require collaborative efforts and innovative strategies,” he said.
