The Malaysia My Second Home (MM2H) programme, recently revised by the tourism, arts and culture ministry (Motac), is forecasted to have a significant positive impact on the property sector, particularly in the high-end segment. This forecast comes from Hong Leong Investment Bank Bhd (HLIB), which has upgraded the sector’s rating from ‘neutral’ to ‘overweight.’
A New Cycle for Malaysia’s Property Sector
The revised MM2H programme marks a new cycle for Malaysia’s property market. Developers and foreign property purchasers had been in a ‘wait-and-see’ mode, awaiting clarity on the new conditions. With the government’s announcement of the revised conditions, the sector is poised for renewed activity and interest.
Key Changes in the MM2H Programme
The new MM2H programme includes several relaxed conditions that are expected to rejuvenate interest. Key changes include:
- Reduced Fixed Deposit Requirement: This change is seen as a significant positive, making it easier for more participants to join the programme.
- House Purchase Mandate: Unlike previous versions, the new guidelines require MM2H holders to purchase a house, with minimum purchase values set at RM600,000 for Silver, RM1 million for Gold, and RM2 million for Platinum categories.
While the house purchase mandate may deter some potential applicants, it acts as an automatic filter, ensuring all MM2H participants invest in the property market rather than renting. This mandate is expected to directly benefit the property sector by driving property sales, especially in the high-end segment.
Economic Benefits Beyond Property
HLIB notes that the revised MM2H programme will also have spillover economic benefits for other sectors, including tourism and healthcare. The renewed interest in the programme is expected to attract a broader range of participants, further boosting economic activities related to these sectors.
Competitive Landscape
Despite the positive outlook, HLIB remains cautious about the increased competition from neighboring countries like Thailand and Indonesia, which also offer similar programmes. The Malaysian government and developers must continue to innovate and provide attractive propositions to stay competitive in this market.
Special Economic and Financial Zones
The revised MM2H programme also introduces a special category for Special Economic Zone (SEZ) and Special Financial Zone (SFZ) applications. The minimum house purchase price for these applications will depend on the respective state requirements, providing additional flexibility and opportunities for high-end property investments.
Conclusion
The revised MM2H programme by Motac is set to significantly boost Malaysia’s property sector, particularly in the high-end segment. With relaxed conditions and a mandatory house purchase requirement, the programme is expected to drive property sales and attract a broader range of participants. While competition from neighboring countries remains a consideration, the overall outlook for Malaysia’s property market is positive, entering a new cycle of growth and development.
HLIB’s upgraded rating to ‘overweight’ reflects this optimistic view, signaling a bright future for developers and property investors in Malaysia.
