KUALA LUMPUR: Malaysia is set to reopen its borders to international visitors in 2022, following a nearly two-year closure, and this will have an immediate impact on the property market by attracting overseas investors and foreign permanent residents.

Juwai IQI co-founder and group chief executive officer Kashif Ansari said the reopening of borders is a symbol of the overall return to normality, economic growth and employment growth.

"In 2020 and 2021, cross-border investments into Malaysian real estate declined considerably, as expected.

"Going forward, we expect the residential market to gain strength as a result of the rebound in the wider economy. We would see transaction volume increase first, and lead over time to price growth," he said in a statement today.

Kashif also expected cross-border residential demand to climb throughout 2022, and would likely reach 2019 levels in 2024 or 2025.

"Even so, demand will be significantly higher than the current status quo. This will be a relief to developers and sellers currently in the market.

"Expect buyers from Singapore to be the first to return, followed by those from other nations that traditionally played a role in the Malaysian luxury housing market," he added.

On the economic outlook, he said the rapid pace of vaccination and new Covid medications are improving the outlook, which is expected to lead in 2022 to a jump in household spending and the desire to consume.

"All the same conditions are also likely to increase property demand and the formation of new households," he said.

Kashif also said the economy is expected to bounce back in 2022, matching corresponding growth in the global economy.

The government is implementing both economic and fiscal stimulus, so Juwai IQI expected gross domestic product (GDP) growth to hit 6 per cent next year.

"At 65 per cent of GDP, exports are so significant that improvements in the global outlook and the resolution of the international supply chain will have positive impacts in Malaysia.

"Employment and household income are direct links to housing demand. In 2022 we expect the economic reopening and government stimulus to drive both upwards. UOB economists are predicting unemployment to decline by 6 basis points to 3.6 per cent for 2022.

"In sum, our forecast is for a growing economic recovery and significantly stronger prospects next year," he concluded.

-- BERNAMA