KUALA LUMPUR: The property market is poised for growth in 2025, with a significant focus on industrial property which will be underpinned by supporting government policies and increase in foreign direct investments (FDIs), says Knight Frank Malaysia executive director of research and consultancy Amy Wong Siew Fong.
The increase in FDIs will lead to a higher number of multinational companies opting to kick start operations and thus drive the economy.
Citing a recent report conducted by Knight Frank titled “Real Estate Highlights”, Wong said respondents had ranked data centres, industrial and logistics as the top three growing real estate investment sectors for 2024.
“Moving into 2025, the green light is for data centres, industrial and logistics, while office, hospitality and retail are rather stagnant,” she said during a panel session at the 18th Bursa-Hong Leong Investment Bank (HLIB) stratum focus series here yesterday.
She highlighted that aside from the Klang Valley, Johor is an obvious market that is expected to grow, especially considering the development of the Johor-Singapore Special Economic Zone (JS-SEZ) followed by Penang.
However, in terms of investment, Wong pointed out that despite the Iskandar region playing a huge role for the JS-SEZ, the market may not be as exciting as the Johor Baru City Centre area.
“If you are talking about the JS-SEZ, I think the industrial sector will continue to be a key sector to look at and manufacturers will continue to look into areas surrounding Senai and Kulai – which always have consistent demand due to its good fundamentals,” she said.
Wong said there has also been an increase in interest in the Sarawak and Sabah region, considering its strong drive towards the green agenda.
Asked about expected downside risks for the year, Wong said there are factors that are impossible to predict such as changes in policies and rate cuts.
“With all these chess pieces in place, I think 2025 is going to be a good year for the property market,” she said.
Sharing the same optimism, HLIB group managing director and chief executive officer Lee Jim Leng said affordability remains a key factor for the property market moving forward.
“In 2025, we are expecting higher wages for civil servants and the introduction of a higher minimum wage.
“The incremental increase in disposable income is a much welcome factor in catalysing demand and raising affordability for properties across the country,” she said, adding that the current 3% overnight policy rate and stable mortgage rates are also expected to bode well for the property sector.Positive indicators such as stable employment growth rate and an expected gross domestic product growth of 4.9% for 2025, are expected to provide the right conditions for sustained growth within the property sector.
According to the National Property Information Centre, Malaysia’s property transaction values soared to RM105.65bil in the first half of 2024, marking an impressive 23.8% year-on-year growth and the highest in five years.
As of the nine months of 2024, the number was noted to have increased to RM162.96bil.
The Kuala Lumpur Property Index has increased by 31.17% in 2024 and the residential overhang situation was noted to have improved, with a 12.3% reduction in volume of unsold properties.