GDP and inflation or deflation are the 2 key points that influence the Malaysia property market.
Here are some key points about the Malaysia property market that can be taken note:
The Future Carries More Weight
During Covid-19 and the Movement Control Order (MCO) in Malaysia, there was a short drop in almost all sectors such as hotel, wholesale and retail, restaurants, pubs and bars, and industrial production. However, during the May and June period, all these sectors almost came back to 80%, especially manufacturing PMI that increased to over 100%, which actually came back to even before the lockdown period.
This data shows how the Malaysia property market performed in the ‘’past’’. The important thing is, we should pay attention to the ‘’future’’, as it carries more weight in results compared to the statistics.
A Lower Base is Needed to Jump Higher
In order to jump higher, you must squat lower to create momentum to jump.
In this case, the second quarter 2022 of GDP in Malaysia has provided a lower base, and acted as a confidence booster; thus, it was believed that the Malaysia property market in 2023 will have much better performance following the resumption of economic activities in Malaysia.
Deflation is Good Timing for the Property Market
When the OPR is high, the mortgage loan repayment is higher. There are 2 reasons why Bank Negara Malaysia (BNM) reduce the Overnight Policy Rate (OPR):
Economic Inflation
If the inflation rate is high, BNM requires even more to control the inflation, thus increasing the interest rate.
Devaluing of Currency
When any central bank decreases its interest rate in a country, it will normally have an influence on the devaluing of the currency.
From 2.5% in 2022 to 2.75% in 2023, it increased 0.25%, but still, it is beneficial for those who want to invest in the Malaysia property market. Although there is a risk of the devaluing of currency, it is not actually a bad thing as it can help to boost exports overseas as well.
Conclusion
In conclusion, we should look at the future rather than at the past that has performed. If you are looking to invest in property in Malaysia, Invest Malaysia can provide assistance on finding an ideal place, no matter if it is a commercial shop lot, warehouses, factories, lands, and more.
Click to learn more.
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