The recent doubling of Singapore's non-resident property taxes is expected to raise foreign purchases in Malaysia by 15 per cent over the next 12 months, particularly in Johor, Kuala Lumpur, and Selangor.
This is in addition to the already anticipated growth in important Malayan markets, according to Juwai IQI's co-founder and group chief executive officer Kashif Ansari.
The majority of these displaced purchasers will look for property worth RM2 million or more, he said, according to Juwai IQI's estimate.
"We anticipate a significant yet not overwhelming increase in the foreign buyers coming to Malaysia after being turned away from Singapore by the new taxes. That shouldn't be a surprise because that's the purpose of the tax, to turn non-resident buyers away from the city-state," Kashif said.
Singapore increased the tax rate from 30 per cent to 60 per cent for foreigners buying residential properties.
They want to keep prices affordable for locals while preventing the buoyancy that has been brought on by excessive, high-end demand from foreign purchasers.
Singapore has seen a massive increase in foreign buyer interest, with triple-digit year-on-year increases in foreign buyer enquiries in each of the past three quarters.
According to Kashif, Malaysia is in a good position to gain from the new tax.
Due to its proximity to Singapore, Malaysia is the obvious first stop for buyers, he said.
It is also a significantly bigger country with numerous metro property markets that are each about the same size as the whole housing market in Singapore, Kashif said.
"Malaysia can easily accommodate any number of foreign buyers likely to be pushed out of Singapore because of its much larger and more diverse market. 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," Kashif said.
Cross-border trade last year exceeded US$110 billion and this makes investment in Malaysia's real estate more appealing, he said.
"Malaysia is more welcoming of foreign property investment, and its revised MM2H program is explicitly designed for wealthier applicants," he said.