Kuala Lumpur: Higher wages for civil servants and the introduction of a higher minimum wage have been pivotal in driving demand and enhancing affordability for properties nationwide this year, as highlighted by Hong Leong Investment Bank Bhd.

According to BERNAMA News Agency, Hong Leong Investment Bank’s group managing director and chief executive officer, Lee Jim Leng, noted that the current three percent overnight policy rate (OPR) and stable mortgage rates in Malaysia are favourable for the property sector. She emphasized that these low-interest rates make property ownership more accessible for potential investors, during her remarks at the Bursa Malaysia-Hong Leong Investment Bank 18th Stratum Focus Series.

Additionally, Lee pointed out that the government’s initiatives in Budget 2025, such as tax reliefs for first-time homebuyers, further support the sector’s positive outlook. Prime Minister Datuk Seri Anwar Ibrahim announced tax reliefs of up to RM7,000 for homes priced up to RM500,000 and up to RM5,000 for homes priced between RM500,000 and RM750,000.

Lee also mentioned that Malaysia’s stable employment growth rate and an expected GDP growth of 4.9 percent this year provide a strong foundation for sustained growth in the property sector. However, she acknowledged that challenges like affordability concerns, inflationary pressures, and global uncertainties remain, necessitating collaborative efforts and innovative strategies to address them.

According to the National Property Information Centre (NAPIC), Malaysia’s property transaction values reached a five-year high of RM105.65 billion in the first half of 2024, representing a 23.8 percent year-on-year growth. The Kuala Lumpur Property Index is projected to increase by 31.17 percent in 2024. Furthermore, the residential overhang has improved, with a 12.3 percent reduction in unsold properties.

Meanwhile, Knight Frank Malaysia Sdn Bhd executive director Amy Wong anticipates that this year’s property sector focus will primarily be on the industrial sector, driven by government policies encouraging foreign direct investments. Foreign investments lead to the establishment of manufacturing plants, particularly in areas like the Klang Valley, Johor, Penang, and Kedah, which are strategically positioned with ports and electronics hubs.