The emphasis on people-centric infrastructure and sustainability under the recent Budget announcement experts say aligns with global real estate trends such as green building practices and transit-oriented developments. Additionally, the strengthening of the Malaysian ringgit will further reinforce confidence among foreign investors to invest in Malaysia's real estate market, making it a more attractive destination.
Real estate analysts at Knight Frank say these investments will act as a catalyst for property market growth, boosting both residential and commercial demand and enhancing long-term property values.
Infrastructure Development:
Key projects like the expansion of the North-South Expressway, Johor-Singapore RTS, Penang International Airport, and Klang Port—aspiring to be among the world's top 10 ports—are expected to enhance connectivity. The widening of roads at Lingkaran Pulau Indah and Pelabuhan Utara Klang will also support real estate growth in key areas, driving demand for both residential and commercial developments, and bolstering long-term property values.
Tax Relief for First-Time Homebuyers:
The government's provision of tax relief for first-time homebuyers priced at RM750k and below will help address affordability challenges in the housing market. This policy is set to stimulate residential real estate demand, encouraging more individuals to take steps toward homeownership and driving growth in the residential property sector.
Tax Incentives for Flexible Working:
The introduction of tax incentives for flexible working arrangements is expected to reshape demand in the commercial real estate sector. Companies may increasingly seek adaptable office spaces that cater to hybrid work models, creating new opportunities in the market for innovative office design and space usage.
Sustainability and ESG:
With the introduction of the Carbon Capture, Utilisation, and Storage (CCUS) initiative and incentives for renewable energy projects, the real estate industry is poised to benefit from a growing demand for green-certified buildings. These measures reflect Malaysia's alignment with global sustainability trends, positioning the country to attract ESG-conscious investors.
Industrial Real Estate:
The government's focus on high-value sectors such as Electrical & Electronics (E&E) and AI, supported by investment tax incentives, will likely create opportunities for the industrial real estate sector, especially in developing smart logistics and tech-driven industrial parks. We anticipate increased interest in logistics hubs and manufacturing facilities as Malaysia continues to grow its digital and high-tech sectors.
Affordable Housing and Public Facilities:
The additional allocation for affordable housing and public infrastructure is a welcome development that addresses the ongoing need for quality housing across various income groups. This move supports the residential market while improving the overall urban landscape, especially in underserved areas.
Emphasis on East Malaysia:
The substantial budget allocations for Sabah and Sarawak aim to reduce development disparities, with key infrastructure projects like the Pan Borneo Highway and SSLR enhancing connectivity and stimulating growth in logistics, industrial parks, and urban areas. Airport expansions in Tawau and Miri will boost tourism and commercial activity, increasing demand for hospitality and retail properties.
Additionally, the Sarawak Cancer Centre highlights investment in healthcare infrastructure, opening up opportunities in healthcare-related real estate. These initiatives position both states for increased public and private investment in the real estate sector.
Merger of Invest KL and MIDA:
The merger of Invest KL and MIDA presents a streamlined approach to attracting foreign investments. This consolidation is likely to spur interest in commercial and industrial real estate as Malaysia becomes more competitive, drawing in multinational corporations looking for high-quality, strategic locations.
Knight Frank Malaysia said the goodies are forward-thinking with long-term strategies for the property sector however the real impact on the market will depend on the successful implementation of these policies.
