Malaysia Property Market Outlook In 2020
Malaysia Property Market
Is the property market in Malaysia going to get better or deteriorate in 2020? According to the National Real Estate Information Center Malaysia’s (NAPIC) first-quarter survey, the volume of transactions in Malaysia’s 2019 has increased. Comparing to 2018, the real estate transactions in 2019 improved 0.8% in the first quarter, with the total value of sales of 68.3 billion Ringgit. Although the result isn’t impressive, the HOC Ownership Plan implemented by the Ministry of Finance and the Ministry of Housing and Local Government has laid a strong impetus for the real estate market in 2019. It has gradually reduced the slow-moving housing market. The issue is whether there are any countermeasures to sustain the current trend in our property market after the end of the (HOC) homeownership campaign. Thus, let’s discover the upcoming property market trend of Malaysia in 2020. 2020 is said to be a landmark year for Malaysia.
Key factors that would deal an impact in Malaysia’s 2020 property market:
- Greater Kuala Lumpur
- Tun Razak International Trade Centre Project
- Malaysia Tourism
- Year 2020 Home Buying Policy
Greater Kuala Lumpur (Greater KL)
On September 25, 2010, the Malaysian government announced they would spend RM172 billion to build the “Greater Kuala Lumpur” project, which will soon be realized. The plan seeks to increase Malaysia’s gross national income in housing prices to USD 15,000, create 3.3 million jobs, and attract USD 444 billion in investment by 2020.
From the three aspects of infrastructure, people’s income and living environment, Malaysia’s business environment will be strengthened, making Kuala Lumpur rank among the 20 most livable world-class metropolises in the world in 2020, and to become the top 20 cities with the highest economic growth rate in the world.
With the realization of the plan, it will attract more investors to grasp the investment opportunities in the Greater Kuala Lumpur project. The influx of large numbers of migrants will inevitably increase the demand for housing properties, which in turn will lead to a continuous rise in house pricing in Kuala Lumpur.
Tun Razak International Trade Centre (TRX)
The total development area of up to 70 acres will start operating in 2020. The Tun Razak International Trade Center will be the most crucial economic booster under the Greater Kuala Lumpur project. It is expected that more well-known companies will be attracted by then, and up to 500,000 jobs will be created.
International financial institutions that choose to operate the Tun Razak International Trade Center will be exempted from tax for 10 years. Other incentives include exemption from stamp duty, industrial building allowance (IBA), accelerated capital diminution, and tax exemption for real estate developers. It is strongly believed that the establishment of these well-known companies in the Tun Razak International Trade Centre (TRX) will indirectly drive the property market in Malaysia upwards.
Malaysia Tourism Year
In order to achieve Malaysia’s 2020 tourism year goals, the Malaysian government announced in the October 2019 ‘s budget that RM1.1 billion would be allocated to the Ministry of Tourism, Arts and Culture, including RM90 million as an awareness, promotion, and plan for the 2020 tourism year.
With this, it will attract 30 million international tourists and generate tourism revenue of RM100 billion. The government is also working hard to make Malaysia the best medical travel destination. Since 2018, as many as 1.2 million tourists have participated in medical travel plans. The 2020 tourism year will undoubtedly bring more benefits to the investors in the hotel & AirBnB industry.
2020 Home Buying Policy
Under the 2020 Malaysian Budget, the Malaysian government proposes to lower the threshold for foreigners to purchase a home above RM1 million to RM600,000, which aim to reduce the problem of overhang property in the second half of 2019, while stimulating the local real estate market and introducing foreign capital.
In addition to this, the government will also extend the Youth Ownership Scheme, which will be managed by the Bank Simpanan Nasional (BSN) until December 21, 2021. The scheme will not only benefit up to 10,000 young first-time homebuyers between the ages of 25 and 40, but they will also receive a government subsidy of RM200 per month, a 50% stamp duty exemption, and a 10% loan guarantee.
What’s your thought on the real estate market trend in 2020? Let’s talk!