Offshore purchases of Malaysian residential properties are expected to return to pre-Covid levels within the next 18 months, or by the end of 2023, according to a Juwai IQI survey of nearly 350 real estate agents across the country.
Around 15 per cent of agents believe that foreign buying will return to its previous levels by the end of the year.
Juwai IQI co-founder and chief executive officer Kashif Ansari said 30 per cent of agents believe foreign buying will only return to previous levels by June next year, and 23 per cent believe it will only return by the end of the year.
According to the Q3 2021 Juwai IQI Property Survey & Index, foreign buyers accounted for 10 per cent to 15 per cent of new and second-hand property transactions in Malaysia's largest cities.
"One can estimate that foreign buyers' purchase is in the range of RM1.8 billion of real estate per quarter, or RM7.2 billion per year," Kashif said.
Kashif said the Malaysian housing market remains appealing to buyers from all over Asia, particularly China, due to the high quality of life and low prices.
According to him, Chinese buyer demand for Malaysian homes is about one-third of what it was before the pandemic, but it has already begun to rise again.
"The drop has been due to the reduction in travel between the two countries. We are already seeing a similar increase in property market activity from Singaporean-based buyers after the border with Singapore opened earlier this month," he said.
Buyers believe that Malaysia has great potential for price and rental appreciation in the coming years, making this a good time to purchase, he said.
"We believe that MM2H (Malaysia My Second Home), will continue to be a successful program under the revised policies. Authorities announced in January that they had received 111 applications," he said.
According to Kashif, another major draw for Malaysian real estate is the country's education system.
"Malaysia can attract students to its educational institutions, which would be a big win for the Malaysian economy. The educational sector has a significant employment base. There is a large economic multiplication factor because students attending Malaysian schools and universities spend two to three dollars in retail, housing, and other sectors for every dollar they spend on school fees.
"In 2019, there were more than 32,000 international students enrolled in Malaysian educational institutions, accounting for about six per cent of total student numbers. In 2022, the number of international students has reduced by 30 per cent but we believe that it will begin climbing this year, before returning to the pre-pandemic level by 2025," he said.
Meanwhile, Kashif believes that the reopening of borders and the resumption of travel means that foreign buyers are returning.
"Foreign investment is essential to the Malaysian property market. Malaysia has many advantages as a destination for foreign investment. The fact that Malaysia's economy will benefit from the current global environment of commodity price growth sets us apart from many other Southeast Asian countries. That is a major selling point.
"Strong economic and employment growth is likely to lead to strong property market performance. As inventory is sold down and prices even begin to rise, foreign investors will find the Malaysian market irresistible. Most investors want to purchase in a rising market, and few have the fortitude to buy when prices are falling," he said.