12 experts weigh in on RCEP’s impact on the property market in Malaysia.
For the past several years, ASEAN has been experiencing a strong and consistent growth, well above the developed economies and the world averages. ASEAN, with its more than 700 million population, is among the 5 biggest economies of the world and since its inception has been regarded as one of the most exciting markets of the future. The RCEP Agreement, a new trade and economic “preferred partnership” agreement now includes China, South Korea, Japan, Australia and New Zealand.
Recently signed, the RCEP agreement, which will only be fully enforced within the next two years, will definitely speed up growth in the region.
Malaysia, which in terms of development and per-capita income, comes third after Singapore and Brunei, has the great advantage of being high up on several rankings.
From ease of doing business to education, health and medical services, infrastructure and much more, Malaysia stands above our regional peers and is more competitive compared to the more developed Singapore and Brunei in terms of costing.
I am expecting a surge in demand for properties from foreigners from the 5 “new partner countries” within the next 4 to 5 years; and this will bring in a healthy demand for highly priced residential dwellings in KL, Iskandar Malaysia and Penang, as the first three destinations.
By 2030, we should see a much wider demand covering areas such as East Malaysia (Kota Kinabalu, Kuching and Bintulu) and West Malaysia’s east coast mostly in the surrounding areas of Kuantan. All these could be boosted and proceed faster if the government initiates higher demand through MM2H revision, easier immigration procedures and revised foreign threshold.
Please find a score card below for ASEAN which gives more than one valid reason for foreigners to choose Malaysia first.
RCEP mainly focuses on facilitating cross border trade and investment via removal of tariffs, standardisation of rules and practices, and investment guarantees, etc, so impacts will be more indirect, from business growths arising from these initiatives.
Any impact will again be more longer-term than immediate especially for the property sector. There are also structural changes expected on how we work and shop that potentially require less space, so for commercial segments, they a re not likely to benefit as much given the countervailing factors. The logistics and industrial sectors are likely to be the main beneficiaries from this in the immediate and longer term.
In terms of investment, Malaysia needs to upgrade its playbook to be more competitive to attract more FD investments. This has been well debated, and it’s acknowledged that we have lots of structural weaknesses that need to be addressed in the long term. This will need both money and political will, besides time.