Kuala Lumpur: Successful tariff talks between China and the USA are already boosting dealmaking in Malaysia’s property market, according to Kuala Lumpur-headquartered global real estate agency IQI.
“Prior to these talks, real estate purchases in Malaysia dropped 6% versus the same quarter last year. Much of the decline was because the U.S.-China trade impasse froze many deals in their tracks. Some decision-makers decided to wait to see what would happen before committing hundreds of millions of ringgit on long-term investments.
“Then, on Monday, the U.S. and China announced a 90-day tariff truce. Now, after just 24 hours of good news about the China-U.S. talks, investors and developers are already moving quickly to restart delayed projects,” said IQI Co-Founder and Group CEO Kashif Ansari. “I think almost everyone in the real estate industry got into the office early this morning. We have major buyers preparing to sign contracts and developers preparing to lay the first bricks for their new buildings.
“I think that shows how hungry we have all been for positive news. All the fundamentals are strong in Malaysia. Good policies and regulations are in place. With some reassurance about global stability, the capital flowing into property deals will increase significantly.
“It may feel like it has taken a long time to get to this trade truce. As China’s trade representative said, ‘Good food is never too late.’ Good news is always welcome.
“It’s not just our real estate markets that are relieved about the truce. The U.S. dollar rose, the American S&P 500 index popped by 2.6% yesterday morning, and the Hong Kong Hang Seng index climbed by 1.7% in the final hour of trading after the news was announced.
“While the China-U.S. tariff truce is good news, it’s only a 90-day agreement. Analysts believe the two countries will arrive at a permanent agreement before that period is up, and that will be the signal that stability is returning to the global economy. “If the trade battle can be resolved without any new surprises, we forecast up to a 2% rise in home prices in the second half and a further decrease in the residential overhang. Prices for terraced homes will climb the most, followed by high-rise and detached homes.”
