The reopening of borders will have a direct impact on the property market, economic growth, and employment growth.

AFTER a nearly two-year closure of our borders, Malaysia is set to reopen its borders to international visitors in 2022.

Impact on real estate

The reopening of borders will have a direct impact on the property market by bringing overseas investors and foreign permanent residents to Malaysia. More broadly, the reopening of borders is a symbol of the overall return to normality, economic growth, and employment growth.

We expect the residential market to gain strength as a result of the rebound in the wider economy. Transaction volume will increase first, and lead overtime to price growth.

Economic outlook

The rapid pace of vaccination and new Covid medications are improving the outlook, which we expect to lead in 2022 to a jump in household spending and the desire to consume. All the same, conditions are also likely to increase property demand and the formation of new households.

We expect the economy to bounce back in 2022, matching corresponding growth in the global economy. The government is implementing both economic and fiscal stimulus, so we expect GDP growth to hit 6% next year.

Cross border residential buyers

In 2020 and 2021, cross-border investments into Malaysian real estate declined considerably, as expected.

The next few years are less predictable because of the unprecedented nature of our situation. Due to the economic uncertainties and risk of a resurgent pandemic, investors are likely to remain cautious.

However, our base case and the most likely outcome is that cross-border investment into luxury Malaysian residential real estate climbs in both the short and long terms.

We expect cross-border residential demand to climb throughout 2022. It will likely reach 2019 levels in 2024 or 2025. Even so, demand will be significantly higher than the current status quo. This will be a relief to developers and sellers currently in the market.

Expect buyers from Singapore to be the first to return, followed by those from other nations that traditionally played a role in the Malaysian luxury housing market.

A significant factor in cross-border demand is the Malaysia My Second Home (MM2H) program. Under the new rules, we are likely to see an increase in the average purchase price for MM2H participants. (thesundaily)