Malaysia’s Foreign Direct Investment (“FDI”) in 2023 proved encouraging, given the nation’s competitive advantage of skilled and available workforce, relative low cost of living and technological advancement. The relaxation of the Malaysia My Second Home (MM2H) programme, announced by the Government in December 2023, is on the right track to boost foreign investment in Malaysia particularly in real estate sector. The property market in 2023 showcased a positive growth, largely attributable to the improving labour market conditions and implementation of various government initiatives and assistance such as the MADANI Economy Framework. Initiatives outlined in the National Budget 2023 also supported this growth, such as the full stamp duty exemption on the instrument of transfer and loan agreement for the purchase of the first residential home priced up to RM500,000 by Malaysia citizens to remain until 31 December 2025. Another initiative was the increase of stamp duty remission from 50% to 75% for the purchase of the first residential properties priced between RM500,000 to RM1 million by Malaysian citizens and applicable for sale and purchase agreements executed until 31 December 2023. Budget allocations were also accorded for housing in rural areas as well as for development under the People’s Housing Programme, Rumah Mesra Rakyat and the Project Perumahan Awam Malaysia. On the demand side, mixed movements are shown in the indicators of residential and non-residential property demand. With the exception of a slight decline in local application for residential purchases, loan applications and approval for the non-residential property registered a positive increase. PROGRESSIVE ECONOMIC GROWTH FY2024 has been a year of continuous growth and progress despite the many challenges experienced. The global economy has been impacted by the geopolitical tensions with the ongoing Ukraine-Russia conflict, heightened further by the strife in the Middle-East. Rising inflation and tighter financial conditions have seen a marked tightening of monetary policy. This is in addition to the disruption in the supply chain and increased pricing of products and services across countries. The above factors weighed significantly on Malaysia’s economy, compounded by the increased inflation, unemployment and shrinking incomes, hence reducing the purchasing power of potential homeowners. Compounding this was the increase in cost of raw materials for construction and difficulty in securing financial loans. However, notwithstanding the global, domestic financial and economic environmental factors above, the property market proved resilient in 2023, supported by an overall positive performance. In 2023, a total of 399,008 transactions worth RM196.8 billion were recorded, each showing an increase of 2.5% and 9.9% respectively compared to 2022, which recorded 389,107 transactions worth RM179.1 billion. Keeping a pulse on the erosion of the ringgit and growing inflation, Bank Negara Malaysia remained resolute in maintaining the overnight policy rate (“OPR”) at 3.00% basis points for the large portion of the Group’s financial year 2024. CHAIRMAN’S STATEMENT Lumina, Eka Heights KEY MESSAGES MATRIX CONCEPTS HOLDINGS BERHAD 26
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