The Malaysian property sector is poised for a potential resurgence in 2024, thanks to a growing influx of foreign investors and the government’s ongoing review of the Malaysia My Second Home (MM2H) program criteria. According to Teh Heng Chong, CEO of Avaland Bhd, this development could particularly benefit properties priced over RM1 million.
Optimism in the Property Market: The property market is showing signs of optimism, with an anticipated increase in property launches in the coming year. Moreover, the number of completed but unsold overhang units has been on the decline, adding to the positive sentiment in the sector. The entry of more foreign investors and the potential revision of MM2H criteria are expected to further stimulate the property market.
Addressing Rising Construction Costs: One challenge on the horizon is the increase in the service tax (SST) rate to 8% in 2024, up from the current 6%. Developers are exploring strategies to manage prices amid rising construction costs. Teh Heng Chong emphasizes the need to strike a balance between maintaining market affordability and covering the growing expenses of construction.
Avaland’s Green Financing Collaboration: In related news, Avaland has partnered with AmBank for a RM129.8 million green financing package for the first phase of its latest mixed development, Alora Residences, located in Subang Jaya. Alora Residences comprises 770 serviced apartment units and eight retail units with a gross development value (GDV) of RM552 million. Since its launch in August 2023, it has achieved a take-up rate of 56%, with unit sizes ranging from 923 to 1,457 sq ft and prices starting from RM693,800.
AmBank’s Commitment to Sustainability: AmBank Group CEO Datuk Sulaiman Tahir highlights the bank’s commitment to promoting sustainability through green financing. Between April and August 2023, the bank approved RM1.3 billion in green financing, out of its targeted RM4 billion for the financial year 2024 (FY24). Sulaiman stresses the urgency for the real estate sector to embrace environmental, social, and governance (ESG) principles, as property development significantly impacts climate change. He emphasizes that real estate stakeholders must recognize their responsibility to actively manage ESG and climate-related risks as a routine aspect of their business practices.
In conclusion, the anticipated growth in foreign investment and potential changes in MM2H criteria are set to breathe new life into Malaysia’s property sector in 2024. Developers are gearing up for increased activity while keeping an eye on cost management, and green financing initiatives continue to gain momentum, further aligning the sector with sustainability goals.