Experts have predicted that for the most part, Malaysian property outlook 2023 will be marked by uncertainty, with overall neutral to weak economic forecasts reported across the globe.
There’s a silver lining here in Asia, however, with some bright spots in economic growth across markets and sectors, including real estate. It is also clear that things aren’t looking quite as dim in comparison to larger or advanced economies in Europe and the United States (US).
According to the International Monetary Fund (IMF) Economic Outlook, emerging Asian economies such as that of many Southeast Asian countries will continue to lead global growth in 2023.
IMF’s forecast projects the 2023 Gross Domestic Product (GDP) growth for Malaysia will be at 4.4%. Comparatively, the US has a 1.1% GDP growth forecast, while Europe’s is at 0.5%. China has also been given a 4.4% projected GDP growth.
2023 economic projection chart (Photo: Savills)
PropertyGuru reports that Malaysia’s steady recovery as we entered the endemic phase in 2022 has decelerated due to global events, such as inflation spurred by the Russian-Ukrainian conflict and the tightening of the US’s monetary policies, as well as the downturn in China’s economic growth.
Still, among more positive signs for Malaysia is the reopening of international borders, leading to a resurgence of the labour market and a more robust domestic demand, said Dr. Lee Nai Jia, head of PropertyGuru’s real estate intelligence team.
In an interview with EdgeProp, Knight Frank Malaysia group managing director Sarkunan Subramaniam pointed out that the newly elected unity government in Malaysia will also play a determining factor.
“The global macroeconomic headwinds will impact upon Malaysian markets. However, we are still hopeful that the newly-elected unity government will be able to outline clear and consistent policies in driving economic investments into our country, and encourage all direct measures to revitalise and sustain the growth of the property sector,” he said.
In short, federal incentives, clear and consistent policies and strong economic policies will impact the property market for the better.
With all that’s said about the Malaysian property outlook for 2023, here are 3 good reasons to still invest in property here in Kuala Lumpur:
The vibrant heart of Kuala Lumpur City Centre (Photo: Alex Cheong)
#1 Location and outlook
The good news is that Southeast Asia’s property market continues to exhibit resilience. Despite challenging macroeconomic factors, Dr. Lee of PropertyGuru reported that Malaysia and Vietnam both recorded the highest GDP increase in Q2 of 2022, and is set to continue a positive – albeit more conservative – recovery.
In the branded residence sector, the exponential growth and demand has continued even throughout the pandemic. And with the global top economies predicted to struggle in 2023, Southeast Asia is a promising choice to look towards in terms of alternative real estate investment for high-net-worth-individuals. Incidentally, 2023 is set to see more branded residence offerings in Southeast Asian cities, whether it is hotel-led or by key players like YOO.
Artist’s impression of 8 Conlay, one of Kuala Lumpur City Centre’s last freehold branded residences
#2 Ease of investment and living in Malaysia
Malaysia is one of the very few countries in Asia that allows foreign private ownership of land. In comparison with other regional countries, the cost for investing in real estate is also competitive and clear cut, with no hidden taxes or fees.
In Sept, 2022, the Malaysian government also introduced the Premium Visa Programme (PVIP) to supplement the existing Malaysia My Second Home programme. PVIP is a long-term residency visa expected to allow its recipients to live, work or study here for up to 20 years, and will accommodate spouse, children, parents and even foreign domestic helpers. There is no minimum stay requirement and the visa holder will have permission to purchase real estate locally.
In terms of quality of living, the affordable cost of living here in Malaysia compared to similarly developed cities and countries around Asia makes it an attractive choice. Malaysia has also ranked consistently in the top 20 of peaceful nations under the Global Peace Index of the world, with English being a commonly used language in social and business settings.
Value added services such as valet or concierge can increase the demand for your property (Photo: Kempinski)
#3 Opportunity remains
In every challenging situation, there is always opportunity. While not completely recession-proof, property investment remains a less volatile and safe-bet option in the long term. It is how one diversifies the property portfolio that will make the difference. Experts have pointed out some key factors that can help create a strong property portfolio:
1) Attractive location
High demand areas with limited supply. For example, a city-centre location close to key business and leisure offerings.
2) Value-added services
Whether your property has services such as property and tenant management, retail offerings, or world-class amenities and personalised concierge services such as those offered in hotels.
3) Property type
In terms of value and resilience of investment, if your investment comes with a brand attached, a desirable and luxurious design, and has the potential to yield steady rental demand.
If you’re looking to invest in one of the last freehold properties in the heart of Kuala Lumpur City Centre, 8 Conlay is set to house the first YOO-designed twin branded residence in Malaysia, YOO8 Serviced by Kempinski. The much-anticipated Kempinski Hotel Kuala Lumpur will also be part of 8 Conlay. To find out more, contact us here.