Miichael Yeoh

Tag: Malaysia property market

  • New Launch vs Subsale: Which Property Should You Buy?

    New Launch vs Subsale: Which Property Should You Buy?

    Written by: Miichael Yeoh

    A new property feels safer. An existing property feels more predictable.

    But neither statement is necessarily true.

    A new launch may offer attractive incentives, modern facilities and a fresh building. A subsale property may allow you to inspect the actual unit, understand the surrounding neighbourhood and investigate existing rental demand.

    So, which should you buy?

    The answer depends on what you’re paying, what you’re getting, what risks you’re taking and what you expect the property to deliver.

    Let’s look beyond the showroom and examine the decision properly.

    1. The Malaysian Property Market Is Giving Buyers a Reason to Be Selective

    Malaysia’s property market remained active in the first half of 2026.

    The first-half property market report recorded 187,320 property transactions worth RM105.12 billion. At the same time, 33,094 completed residential units remained unsold, valued at approximately RM17.78 billion.

    Developers also launched 27,832 residential units during H1 2026, with reported sales performance of 16.6%.

    These figures don’t mean new launches are bad or that subsale properties are automatically better.

    They tell us something more useful.

    Buyers should not assume that a new launch is a good purchase simply because a developer has launched it, or that an existing property is good value simply because someone is reselling it.

    Every property needs to be evaluated on its own merits.

    And that brings us to the first important difference.

    2. New Launch vs Subsale: What Are You Actually Buying?

    Let’s start with the basic distinction.

    A new-launch property is generally purchased directly from a developer, often before construction is completed.

    A subsale property is an existing property purchased from its current owner.

    That difference affects much more than the age of the building.

    Property Condition

    New launch: The property may still be under construction, so the finished quality cannot yet be fully assessed.

    Subsale: You can inspect the actual unit and building before making your decision.

    Pricing

    New launch: The price is set by the developer, with incentives or rebates subject to the terms offered.

    Subsale: The price may be negotiable, depending on the seller and comparable market transactions.

    Rental Income

    New launch: Rental income generally begins only after completion, handover and preparation for tenants.

    Subsale: Rental income may begin sooner if the property is ready and suitable for tenants.

    Construction Risk

    New launch: An uncompleted project carries delivery and construction-related risks.

    Subsale: A completed property avoids the risk of waiting for construction completion, although other risks remain.

    Defects and Renovation

    New launch: You may need to furnish the unit and address defects identified at handover.

    Subsale: You may need to repair existing defects, renovate or replace ageing fittings.

    Facilities and Management

    New launch: The long-term quality of building management has yet to be demonstrated.

    Subsale: You can assess the existing facilities, maintenance and management standards.

    Rental Demand

    New launch: Future rental demand must be estimated using market evidence and competing supply.

    Subsale: Existing rental listings and tenancy evidence may help you assess demand, although future conditions can change.

    Main Uncertainty

    New launch: Completion, final quality, future supply and market conditions.

    Subsale: Hidden defects, maintenance costs, building condition and future resale demand.

    Neither option wins every category.

    The mistake is choosing based on the benefits of one option while ignoring its disadvantages.

    3. Is a New Launch Cheaper Than a Subsale?

    This is where many buyers need to slow down.

    Imagine two condominiums in a similar location.

    Property A: New launch

    • Developer’s selling price: RM600,000
    • Advertised rebate: 8%
    • Indicative price after the rebate: RM552,000

    Property B: Subsale

    • Seller’s asking price: RM530,000
    • Negotiated purchase price: RM515,000

    At first glance, the subsale property appears cheaper.

    But are we comparing the same thing?

    What is the actual transaction price of comparable units?

    Does the new launch include furnishing, parking or other items that would otherwise cost extra?

    Does the subsale unit require RM30,000 in renovation?

    Are the maintenance fees comparable?

    Are both properties equally attractive to future tenants?

    What are the legal, financing and other acquisition costs applicable to each transaction?

    Until you answer these questions, you don’t know which property offers better value.

    Look Beyond the Advertised Price

    Developer incentives can reduce the buyer’s effective cost, but their value depends on the actual terms and what is included.

    Similarly, a subsale seller’s asking price may not reflect the final negotiated price.

    Compare the complete acquisition cost rather than relying on the headline figure.

    And remember:

    A lower purchase price does not automatically mean a better investment.

    4. The Hidden Difference: When Can the Property Start Working for You?

    For investors, this may be one of the most important differences.

    Suppose you purchase a new-launch condominium that will take several years to complete.

    During that period, you may have construction-stage financing payments, depending on the loan structure. You also have to wait until the property is completed, handed over and ready before rental income can begin.

    Now consider a completed subsale condominium.

    If the unit is in good condition and the rental market is established, you may be able to rent it out after completing the purchase and preparing the unit.

    The difference is time.

    Let’s Use a Simple Illustration

    Assume the subsale property can generate RM2,000 per month in rent once it is ready and occupied.

    If the new launch takes three years to complete, the theoretical gross rental income forgone over those 36 months is:

    RM2,000 × 36 months = RM72,000.

    That is a significant amount.

    But don’t misunderstand the calculation.

    RM72,000 is not a guaranteed loss or a complete comparison of the two investments. It is an illustration of potential gross rental income over that period, assuming the subsale could have been rented continuously.

    Actual results would depend on vacancy, expenses, financing, tenant demand and the timing of rental readiness.

    The new launch might also appreciate during construction. The subsale might need substantial renovation or suffer from weak tenant demand.

    The lesson is not that subsale always wins. It’s that time has a financial value, and investors should calculate it.

    5. Can You Trust the Rental Demand for a New Launch?

    This is a question I would ask before purchasing either type of investment property.

    A developer might describe a project as ideal for young professionals, expatriates or students.

    That may be a reasonable target market.

    But a target market is not proof of rental demand.

    Before buying, investigate:

    • Who actually works or studies nearby?
    • What rents are comparable units achieving?
    • How many similar units are already available?
    • How long do comparable properties typically take to find tenants?
    • What facilities and transport options matter to the intended tenants?
    • How many competing developments are expected to be completed?
    • What will make your property more attractive than the alternatives?

    For a completed subsale unit, you may be able to examine existing rental listings, speak to property managers and investigate actual tenancy evidence.

    For an uncompleted new launch, you will have to make more assumptions about future conditions.

    That doesn’t make the new launch a poor investment.

    It simply means the further you are from observable evidence, the more carefully you need to test your assumptions.

    6. What About Building Quality and Defects?

    One advantage of buying a new residential property from a developer is that qualifying purchases under prescribed housing development agreements have statutory protections, including a defect liability period.

    For standard Schedule G and Schedule H agreements, the defect liability period is generally 24 months from vacant possession, subject to the applicable agreement and legal provisions.

    However, a new building is not necessarily a defect-free building.

    You still need to inspect the unit when it is handed over, document defects and follow the proper procedures for reporting them.

    A subsale property presents a different situation.

    You can inspect the actual unit before purchasing, but you may inherit problems such as:

    • Water leakage
    • Damaged flooring
    • Ageing electrical or plumbing systems
    • Poor renovation work
    • Lift or common-area maintenance issues
    • Inadequate sinking-fund reserves
    • Disputes or management problems

    Some problems are visible. Others may require professional inspection or further investigation.

    For a subsale condominium, I would want to understand the condition of both the individual unit and the overall building.

    A brand-new unit can have defects. An older unit can be well maintained. Age alone does not determine quality.

    Note: The applicable legal protections depend on the type of property, transaction and agreement. Buyers should confirm their position with a qualified property lawyer.

    7. Don’t Ignore the Building’s Management

    This is particularly important when comparing condominiums.

    A new launch may offer an impressive swimming pool, gym, landscaped garden and other facilities.

    But who will maintain them?

    Will the maintenance charges be sustainable for residents?

    Will the facilities remain attractive after several years?

    For a completed property, you have something valuable: evidence of how the building is actually being managed.

    Look at:

    • The condition of common areas
    • Lift maintenance
    • Cleanliness and security
    • Maintenance-charge collection
    • Sinking-fund position
    • Major repairs required
    • Management responsiveness
    • The overall resident experience

    A well-maintained older condominium may provide a better ownership experience than a newer building with poor management.

    Equally, an older building with serious maintenance problems may create expenses that a buyer has underestimated.

    Don’t just compare the units. Compare the buildings behind them.

    8. Which Is Better for First-Time Homebuyers?

    There is no universal answer, but the priorities are different from those of an investor.

    A first-time buyer should consider:

    Affordability: Can you comfortably manage the purchase and ongoing costs?

    Move-in timing: Do you need a home soon, or can you wait for construction to finish?

    Location: Does it work for your job, family, transport needs and daily routine?

    Condition: Are you prepared to manage renovation, repairs or defects?

    Certainty: Would you prefer to inspect an existing unit, or are you comfortable committing to a property that has not yet been completed?

    Future flexibility: If your job or family circumstances change, will the property be reasonably easy to rent out or sell?

    A new launch may suit someone who wants a new home and can wait for completion.

    A subsale may suit someone who wants to inspect the actual property and move in sooner.

    But neither option should stretch your finances to the point that a change in income becomes a crisis.

    Your first property should support your life, not make your life revolve around the mortgage.

    9. Which Is Better for Property Investors?

    For investors, I would focus less on whether the property is new or old and more on the investment case.

    Ask five questions.

    A. What Is My Total Investment?

    Include the purchase price, transaction costs, financing costs, renovation, furnishing and other relevant expenses.

    B. When Can I Realistically Earn Rental Income?

    Account for construction, completion, preparation, vacancy and tenant-finding time.

    C. What Is My Expected Net Return?

    Do not confuse gross rental yield with actual cash flow or net return. Include recurring expenses, vacancy, repairs and financing where relevant.

    D. What Competition Am I Facing?

    Consider both existing properties and future supply.

    E. How Will I Exit?

    Think about the future buyer, resale demand, likely competition and the price at which the property might realistically sell.

    A new launch could offer an attractive opportunity if the price, location, product and future demand justify the purchase.

    A subsale could be attractive if its price is supported by evidence, its condition is acceptable and its rental or owner-occupier demand is sustainable.

    Either could be a poor investment if the numbers don’t work.

    10. The PDS New Launch vs Subsale Decision Test

    Before making a decision, I would compare the two properties using the same framework.

    1. What is the true acquisition cost?

    Include the purchase price, incentives, legal costs, financing and necessary improvements.

    2. What evidence supports the price?

    Look at comparable transactions and the property’s actual features.

    3. What demand exists?

    Investigate owner-occupier demand, tenant demand and the reasons people choose the location.

    4. What are the holding costs?

    Calculate the mortgage, maintenance, repairs, insurance and other recurring expenses.

    5. What risks am I accepting?

    Consider construction, defects, renovation, vacancy, management and future supply.

    6. What is the realistic return?

    Assess net rental income, financing impact, potential capital appreciation and costs.

    7. How will I exit?

    Identify the likely future buyer, resale demand and competing properties.

    The most important point is to compare like with like.

    If the two properties are in different locations, serve different tenant markets or offer different layouts, a simple price comparison may be misleading.

    And if you’re comparing a completed property with one that won’t be ready for several years, timing needs to be part of the analysis.

    So, New Launch or Subsale?

    My answer is straightforward.

    Buy a new launch when the product, price, developer, location and future demand justify the commitment.

    Buy a subsale when the actual property, condition, market evidence and total cost make the purchase worthwhile.

    Don’t choose a new launch just because it is new.

    Don’t choose a subsale just because it appears cheaper.

    And don’t assume that developer incentives, a beautiful showroom or an existing tenant automatically make a property a good investment.

    The right decision comes from understanding what you are buying and why it should meet your needs.

    That is the difference between choosing a property and evaluating a property.

    The Final PDS Insight

    When buyers compare new launches and subsale properties, they often begin with the wrong question:

    “Which one is better?”

    I would start somewhere else.

    “Better for whom, at what price, for what purpose and over what period?”

    A property that suits a first-time homeowner may not suit a rental investor.

    A property that works for a ten-year holding period may not work for someone who needs flexibility within three years.

    And a property that looks attractive today may face very different competition tomorrow.

    There is no shortcut around the discovery process.

    There is only a better way to make the decision.

    Don’t just compare the properties. Discover the decision behind them.

    Property Discovery System™

    Discover Better. Decide Smarter.

  • WEEKLY PROPERTY ROUNDUP

    WEEKLY PROPERTY ROUNDUP

    Week in Review | Saturday, 3 October – Friday, 9 October 2026

    Explore five property updates from Malaysia, Australia and the UK, covering Budget 2027 housing measures, infrastructure delivery and changing market conditions.

    🇲🇾 STORY 1 — Budget 2027: New Stamp Duty Relief for First-Time Homebuyers

    What Happened?

    On 9 October 2026, Prime Minister Anwar Ibrahim tabled Budget 2027, proposing stamp duty exemptions for eligible first-time homebuyers.

    The proposed measures are:

    • Homes priced up to RM500,000: Full stamp duty exemption on the loan agreement and instrument of transfer.
    • Homes priced up to RM750,000: Full exemption on the first RM500,000, with a 50% exemption on the remaining amount.
    • Proposed eligibility period: Sale and purchase agreements executed from 1 January 2027 to 31 December 2030.

    The government also proposed stamp duty relief for transactions involving the rehabilitation of abandoned housing projects. Prime Minister’s Office Malaysia

    Sources: Prime Minister’s Office of Malaysia — Budget 2027 speech · The Star — First-home stamp duty announcement

    Why It Matters

    Stamp duty can be a significant upfront expense for a homebuyer.

    Reducing this cost could make it easier for some first-time buyers to complete a purchase, particularly those already stretching their savings to cover the deposit, legal fees, moving expenses and basic furnishing.

    However, there is an important distinction between making a home cheaper to purchase and making it affordable to own.

    Monthly instalments, maintenance charges, insurance, repairs and emergency savings remain part of the equation.

    Miichael’s Review

    I welcome measures that reduce the barriers to homeownership.

    But I would not advise anyone to rush into buying a property simply because an incentive is available.

    Before making a decision, buyers should ask themselves three questions:

    1. Can I comfortably afford the monthly repayments?
    2. Will I still have sufficient cash reserves after completing the purchase?
    3. Is this the right property for my needs, location and long-term plans?

    The proposed exemption is useful, but the final eligibility rules and implementation details must also be checked.

    My view: A government incentive should improve a sound property decision, not become the reason for making one.

    🇲🇾 STORY 2 — RM20 Billion Housing Guarantee to Support 80,000 First-Time Buyers

    What Happened?

    Budget 2027 provides for housing financing guarantees of up to RM20 billion through the Housing Credit Guarantee Scheme (SJKP), with the aim of assisting 80,000 first-time buyers.

    The scheme particularly targets people who may struggle to obtain conventional housing financing because they are self-employed or do not receive a fixed monthly income.

    The government also announced nearly RM1 billion for housing initiatives, including Rumah Mesra Rakyat and Program Residensi Rakyat. Four new housing projects were announced for Kulai in Johor, Nilai in Negeri Sembilan, Paya Rumput in Melaka and Pertang Valley in Terengganu. Prime Minister’s Office Malaysia

    Sources: Prime Minister’s Office of Malaysia — Budget 2027 housing measures · The Star — RM20 billion SJKP guarantee

    Why It Matters

    This addresses one of the practical challenges facing Malaysian homebuyers: access to financing.

    Some self-employed individuals have sufficient income to meet repayments but find it difficult to satisfy conventional lending requirements because their earnings fluctuate or are documented differently.

    A financing guarantee can help eligible applicants access housing loans. However, it does not mean every applicant will automatically receive loan approval.

    There is also a wider issue to consider.

    Helping more people obtain financing is only part of the solution. The market must also provide homes that buyers can genuinely afford, in locations that suit their work, family needs and daily routines.

    Miichael’s Review

    This measure is particularly relevant to younger buyers, entrepreneurs and people with non-traditional income arrangements.

    However, I would like to see how the scheme works in practice.

    How accessible will it be? What are the eligibility conditions? Will the homes available to these buyers match their budgets?

    Financing access and housing affordability must work together.

    Otherwise, we may help people qualify for loans without necessarily helping them find suitable homes.

    🇲🇾 STORY 3 — Sabah Pan Borneo Highway: Infrastructure Delivery Matters More Than Announcements

    What Happened?

    The Auditor-General’s Report 2/2026, tabled on 5 October, highlighted cost increases and delivery problems affecting Sabah Pan Borneo Highway Phase 1.

    The report stated that contract costs had risen to RM18.96 billion, compared with the original RM17.91 billion.

    As at 31 March 2026, only 4 of the 35 work packages had been completed.

    The report also identified site-readiness and land-acquisition problems, RM513.99 million in variation orders approved beyond authorised limits, and RM41.37 million in delayed utility claims. These are figures reported in the audit, and the completion count relates to the position at the stated date. EdgeProp

    Source: EdgeProp Malaysia — 5 October property and infrastructure digest, reporting on the Auditor-General’s Report 2/2026.

    Why It Matters

    Infrastructure can influence property values by improving access to employment, commercial centres, tourism destinations and essential services.

    But there is a difference between a project being announced, a project being constructed and a project being completed and operational.

    Delays can postpone the economic benefits that were expected to support surrounding areas.

    For buyers and investors, this means that a property’s location should be evaluated against infrastructure that is actually available, as well as projects that remain under construction.

    Miichael’s Review

    When evaluating property near a major infrastructure project, I would not rely on a developer’s location map alone.

    I would examine:

    • Which sections of the road are already operational?
    • How much travel time will actually be saved?
    • Are employment opportunities and commercial activities growing nearby?
    • Will utilities and public services be sufficient for future development?
    • Is the property priced as though future improvements have already been delivered?

    Infrastructure creates potential, but execution determines when—and whether—that potential becomes real.

    This is an important lesson for property buyers in every state, not just Sabah.

    🌏 INTERNATIONAL PROPERTY WATCH

    🇦🇺 STORY 4 — Australia: Housing Prices Fall for a Sixth Consecutive Month

    What Happened?

    National Australia Bank’s October Housing Monitor, published on 7 October, reported that dwelling prices across Australia’s combined capital cities fell 1.2% month-on-month in September 2026.

    This marked the sixth consecutive monthly decline. Prices were 6.4% below their March 2026 peak.

    NAB also revised its forecast to an 8% decline in capital-city dwelling prices over 2026, with a possible peak-to-trough decline of 11%.

    The median time a property spent on the market increased to 41 days, the highest level since late 2020. These figures reflect NAB’s analysis and forecasts, not guaranteed future outcomes. NAB

    Source: National Australia Bank — October 2026 Housing Monitor

    Why It Matters

    The downturn has broadened beyond the markets that initially showed the greatest weakness.

    For buyers, falling prices and longer selling periods may create more room for negotiation. Sellers may need to be more realistic about pricing and the time required to secure a buyer.

    But a declining market does not automatically mean every property is a bargain.

    A property bought at a lower price can still be a poor investment if rental demand is weak, financing costs are high or the local economy deteriorates.

    Miichael’s Review

    I would not look at falling prices in isolation.

    For investors, the more important questions are:

    • Is the purchase price attractive relative to comparable properties?
    • Can rental income reasonably cover the holding costs?
    • Is the local employment base resilient?
    • Can the investment withstand a longer period of weak prices?
    • Would I still want to own this property if the market took several years to recover?

    The best buying opportunity is not necessarily when prices fall the most. It is when the price, risk and long-term fundamentals make sense together.

    🇬🇧 STORY 5 — United Kingdom: Buyer Confidence Weakens While Rental Demand Remains Firm

    What Happened?

    The Royal Institution of Chartered Surveyors (RICS) published its September UK Residential Market Survey on 6 October.

    The survey reported:

    • New buyer enquiries: Net balance of -22%, compared with -18% in August.
    • Agreed sales: Net balance of -18%, compared with -16% in August.
    • House-price sentiment: Net balance of -32%, compared with -28% in August.
    • Tenant demand: Net balance of +23%.
    • Expected rental growth: Net balance of +37% for the following three months.

    The figures suggest weaker buyer sentiment and sales activity alongside continued rental demand. RICS

    Source: RICS — UK Residential Survey, September 2026

    Why It Matters

    The sales and rental markets do not always move in the same direction.

    In the UK, buyers were becoming more cautious while rental demand remained comparatively strong.

    One important clarification: RICS net balances measure the difference between respondents reporting increases and those reporting decreases. A -32% house-price balance does not mean that actual house prices fell by 32%.

    For property investors, rental demand is only one part of the equation. Purchase price, mortgage costs, taxes, maintenance, regulation and net rental yield all matter.

    Miichael’s Review

    This is a good example of why property investors should separate capital-growth expectations from rental fundamentals.

    A market may offer rental opportunities even when transaction activity is weak. But strong rental demand alone does not guarantee a good investment.

    Investors need to understand what remains in their pocket after financing, maintenance, taxes and other expenses.

    Rental demand is a useful signal. Net returns and the ability to sustain ownership are what ultimately matter.

    WORTH WATCHING

    Over the coming weeks, I would pay particular attention to four developments.

    1. Malaysia’s Budget 2027 implementation

    The proposed stamp duty exemptions are encouraging, but the final eligibility conditions and implementation documents will be important. Buyers should not assume that every transaction automatically qualifies.

    2. Financing access for first-time buyers

    The RM20 billion SJKP guarantee is a substantial measure. The next question is how effectively it translates into approved financing and sustainable homeownership.

    3. Infrastructure execution in Malaysia

    The Pan Borneo audit highlights the importance of monitoring actual construction progress, costs and completion dates. Future property decisions should be based on realistic delivery expectations.

    4. International borrowing costs and market conditions

    Australia and the UK show why buyers and investors must continue to monitor financing costs, transaction activity, prices and rental conditions rather than relying on a single market headline.

    MY TAKEAWAY THIS WEEK

    This week reinforces a principle I have always believed in: a property decision should never be based on price alone.

    Malaysia is trying to reduce barriers to homeownership, but buyers still need sustainable financing and suitable homes.

    Australia reminds us that prices can continue falling longer than investors expect.

    The UK shows that sales and rental conditions can move in different directions.

    And the Pan Borneo audit reminds us that infrastructure announcements only create lasting value when projects are delivered.

    For buyers and investors, the questions remain the same:

    • Can I afford it comfortably?
    • Is there genuine demand?
    • Does the location have the infrastructure and economic activity to support it?
    • Do the numbers work under conservative assumptions?
    • Would this still be a sensible decision if the market did not rise as quickly as I hoped?

    Look beyond the price. Understand the fundamentals before making the decision.

    Miichael Yeoh
    PROPERTY STRATEGIST
    www.miichaelyeoh.com

    Thank you for subscribing!

    Please check your email to confirming your subscription.

  • SST Increase from 6% to 8%: How It Will Impact Malaysia’s Property Industry

    SST Increase from 6% to 8%: How It Will Impact Malaysia’s Property Industry

    Introduction

    Starting July 1, 2025, the Malaysian government officially raised the Sales and Services Tax (SST) from 6% to 8%, aiming to increase national revenue and reduce fiscal deficits. While basic necessities and certain essential services remain exempt, many sectors — including construction, legal, professional, and property-related services — are now affected. This tax adjustment is expected to have ripple effects across various industries, especially the property market, which is already facing affordability challenges.

    This article examines how the SST hike impacts the property industry, giving practical examples and offering insights into how buyers, developers, and investors might respond.

    1. Scope of SST Increase in the Property Sector

    The SST increase does not apply directly to the sale of residential properties, which are exempt from SST. However, indirect costs will go up due to increased service charges in the construction, legal, and property management sectors. These cost increments will eventually be transferred to end buyers and tenants, especially in commercial and high-rise residential developments.

    2. Areas Affected in Property Development

    Here’s a breakdown of how the 2% SST increase affects the property ecosystem:

    Service TypeBaseOld SST (6%)New SST (8%)
    Architect/Engineer FeesRM100,000RM106,000RM108,000
    Legal/Stamping ServicesRM20,000RM21,200RM21,600
    Renovation/Interior Fit-OutRM150,000RM159,000RM162,000
    Property Management ServicesRM50,000RM53,000RM54,000
    Advertising & MarketingRM30,000RM31,800RM32,400

    Example:
    A developer constructing a new serviced apartment project incurs around RM5 million in professional and management fees. Under the previous 6% SST, the tax was RM300,000. Now, it’s RM400,000 — a 33% increase in SST cost, which could result in higher launch prices to maintain developer margins.

    3. Impact on Property Developers

    • Higher Development Cost: Most developers will face a 5–8% increase in overall project costs when combined with inflation and compliance costs.
    • Price Adjustment Pressure: Developers may either absorb the cost (lowering margins) or pass it to consumers — likely raising launch prices, especially in urban areas.
    • Delay in New Launches: Some developers may delay project launches until market conditions stabilize.

    4. Impact on Homebuyers

    Although SST is not directly charged on residential property purchases, buyers may feel the pinch in several ways:

    • Higher Property Prices: Due to rising development and marketing costs.
    • Increased Renovation Expenses: Renovation and interior design are service-based industries and are now charged 8% SST.
    • Increased Maintenance Fees: Management services in condos or commercial buildings may increase, translating to higher monthly maintenance charges for owners and tenants.

    5. Impact on Real Estate Investors

    Investors will also be affected indirectly:

    • Lower Rental Yield: If property prices go up but rental rates remain stagnant, net returns will shrink.
    • Higher Operational Costs: Especially for those managing short-term rentals or Airbnb units (cleaning, advertising, renovation services all now taxed at 8%).
    • Buyer Caution: Investors may delay purchases or switch to lower-risk assets like REITs or landed residential properties outside city centers.

    6. Outlook and Strategies

    Despite the challenges, the SST increase may drive some positive changes:

    • Developers may adopt cost-efficiency technologies to maintain affordability.
    • Buyers may turn to subsale markets, which are less affected by SST-related costs.
    • Investors may focus on cash-flow-positive properties, especially those with low operating costs.

    Conclusion

    The SST increase from 6% to 8% might seem modest on paper, but its cascading effect across the property value chain is real. While residential property sales remain tax-exempt, associated services — from construction to maintenance — will become costlier. As developers adjust pricing and investors reassess risk, Malaysia’s property market may experience a short-term slowdown but could stabilize as the market adapts.

    Final Thought
    For both buyers and investors, 2024–2025 will require careful financial planning and a close eye on property pricing trends. Understanding the real costs behind the price tag is more important than ever.

    From The Desk of Miichael Yeoh