A JUWAI IQI survey of nearly 350 real estate agents across Malaysia found more than two thirds expect offshore buying of Malaysian real estate to return to pre-COVID-19 levels within 18 months – that is, by the end of 2023.
Within this subtotal, 15% of agents believe foreign buying will return to its previous levels as soon as the end of this year.
Of those who believe that foreign buying will only hit its previous levels next year, 30% believe we will reach that milestone by June, while an additional 23% believe we will reach that level by the end of next year.
“The pandemic is almost behind us, and thanks to public sector support and the vaccination campaign, we have learned to overcome it,” said Juwai IQI Group co-founder and chief executive officer Kashif Ansari.
“The reopening of borders and the resumption of travel means that foreign buyer
s are beginning to return. Foreign investment is essential to the Malaysian property market.”
Kashif further noted that Malaysia has many advantages as a destination for foreign investment, and the fact that Malaysia’s economy will benefit from the current global environment of commodity price growth sets the country apart from many other Southeast Asian countries.
“Strong economic and employment growth is likely to lead to strong property market performance. As inventory is sold down and prices even begin to rise, foreign investors will find the Malaysian market irresistible,” he remarked.
“Most investors want to purchase in a rising market, and few have the fortitude to buy when prices are falling.
“Since 2017, Malaysia has leapt from Chinese buyers’ 10th favourite destination to their fifth. Australia and Canada have also become more popular with Chinese buyers during this timeframe.”
The data from Juwai IQI is based on buyer enquiries made through our platform and agent network.
According to Kashif, Chinese buyer demand for Malaysian homes is at about one-third the level it was before the pandemic but has already begun climbing back up.
The drop, he noted, has been due to the reduction in travel between the two countries. Even today, Chinese who want to travel to Malaysia have to undergo an extended quarantine upon returning home. As a result, most Chinese have avoided overseas travel.
“We are already seeing a similar increase in property market activity from Singaporean-based buyers after the border with Singapore opened earlier this month,” Kashif said.
“We believe that in 2022 to 2025, Malaysia has the opportunity to attract international students in K-12, university, post-graduate, and English-language programmes who might otherwise have gone to the US or Australia. In fact, the number of Chinese students in the US is down by 20%.”
Kashif further pointed out that Malaysia can attract students to its own education institutions which would be a big win for the country’s economy.
“The education sector has a significant employment base. There is a large economic multiplication factor because students attending Malaysian schools and universities spend two to three dollars in retail, housing and other sectors for every dollar they spend on school fees,” he acknowledged.
“In 2019, there were more than 32,000 international students enrolled in Malaysian education institutions, accounting for about 6% of total student numbers.
“We believe that in 2022 the number of international students has been reduced by at least 30% and that it will again begin climbing this year before returning to the pre-pandemic level by 2025.”
Kashif said that the Malaysian home market remains appealing to buyers from across Asia due to the high quality of life and relatively low prices. Furthermore, buyers believe that Malaysia has great potential for price and rental appreciation in the coming years, making this a good time to make a purchase.
“We believe the Malaysia My Second Home (MM2H) programme will continue to be a successful programme under the revised policies. Authorities announced in January that they had received 111 applications,” he elaborated.
“NAPIC reports that RM18 bil of residential property were sold in the third quarter [of last year]. The ‘Q3 2021 Juwai IQI Property Survey & Index – Malaysia’ found that foreign buyers account for 10–15% of new and secondhand transactions in Malaysia’s largest cities.
“One can estimate that foreign buyers purchase in the range of RM1.8 bil of real estate per quarter, or RM7.2 bil per year.” – June 14, 2022
