KUALA LUMPUR – Juwai IQI said Singapore’s doubling of property taxes for non-residents last week may result in an estimated 15% increase in foreign buying in Malaysia over the next 12 months.
Singapore has doubled the tax rate for foreigners purchasing residential properties from 30% to 60% to prevent buoyancy that has been introduced by excessive, high-end demand from overseas buyers and preserve affordability for locals.
In a statement today, the global real estate technology group said the move would push more high-end foreign buyers towards Malaysia, particularly to Johor, Kuala Lumpur and Selangor.
“Most of these displaced buyers will seek property worth RM2 million or above,” it said.
Juwai IQI co-founder and group chief executive officer Kashif Ansari anticipates a significant increase in foreign buyers coming to Malaysia after being turned off from Singapore by the new taxes.
“Malaysia is well placed to benefit from the new tax. Malaysia is next door to Singapore, making it the natural first place for buyers to turn.
“Malaysia is a much larger country with multiple metro property markets that are each comparable in size to Singapore’s entire home market and could easily accommodate any number of foreign buyers likely to be pushed out of Singapore because of its larger and more diverse market,” he said.
Ansari also said many businesses and family offices based in Singapore already have investments in Malaysia, which has helped make the two countries each other’s second-largest partner with cross-border trade last year exceeding US$110 billion (RM490.9 billion).
“Malaysia is more welcoming of foreign property investment, and its revised Malaysia My Second Home (MM2H) programme is explicitly designed for wealthier applicants,” he said.
He also noted that Malaysia home sales totalled RM94.3 billion last year, with luxury transactions accounting for about 15% of the total, or RM14 billion.
“A new wave of foreign buyers will be good news for the property overhang, given that 14% of overhang residences are in the highest price range of RM1 million and above,” he added. – Bernama, May 2, 2023
