MALAYSIA’S GROWTH SURPRISE: ECONOMY SURPRISES ANALYSTS, WILL BOOST REAL ESTATE

MALAYSIA’S GROWTH SURPRISE: ECONOMY SURPRISES ANALYSTS, WILL BOOST REAL ESTATE

Kuala Lumpur, 10 February 2026 — Economists have been “happily shocked” by Malaysia’s strong economic growth and have had to upgrade their 2026 forecasts.

Analysts at one major bank call the country ASEAN’s “silver medalist” for its stellar performance. Another important analyst last week called Malaysia a “rising star.”

This strong economy and inbound investment will boost Malaysia’s commercial, industrial, retail, and residential real estate markets, according to comments released today by Kashif Ansari, Cofounder and Group CEO of Juwai IQI.

“I think it’s fair to say some analysts have been happily shocked by the strong performance of Malaysia’s economy despite all the geopolitical and trade policy fears of 2025. Malaysia is experiencing a growth surprise that has forced analysts to upgrade their expectations,” said Mr Ansari. “It’s not just one sector driving growth, but a broad- based expansion across electronics exports, tourism, consumption, and infrastructure investment. These are healthy conditions for the property market.

“Analysts at the IMF, a global financial institution, had to raise their 2026 GDP growth forecast to 4.3% from 4.0%. At the same time, CIMB, a Malaysian bank, found its earlier 4.1% projection too low and has upgraded it to 4.4%.

“One reason for the upgrades is that Malaysia’s third-quarter 2025 growth numbers surprised everyone by being higher than expected. They came in at 5.2% year-on-year, higher than Bank Negara projection of 4% to 5%. When the economic growth rate for the full year is finally calculated, it will probably come in at the high end of expectations. That’s a turnaround from the first half of the year when the numbers came in low.”

Why Real Estate Benefits

“Real estate investors need to understand what’s driving this growth,” Mr Ansari explained. “Electrical and electronics exports are expanding at double-digit rates. That feeds directly into demand for industrial property.

“Tourism has fully recovered to 2019 levels, with Chinese visitors exceeding 20% of their pre-pandemic numbers. That’s excellent news for retail property, hospitality, and short-term rentals.

“And the residential market benefits, too, because private consumption keeps growing at around 5% year-on year, wages are up, and unemployment has dropped to 3%.”

“The team at IQI believes inflation will remain at safe levels of about 1.4% to 1.7%. That will permit Bank Negara Malaysia to keep interest rates steady through 2026.

Economic growth, stable rates, and low inflation make the ideal environment for real estate. It encourages genuine demand from owner-occupiers and businesses.”

Sector-by-Sector Analysis

“Industrial and logistics property will be the standout performer,” Mr Ansari emphasised. “Industrial rents and land values will outperform other property sectors.

Owners of modern logistics facilities and industrial estates with guaranteed power will have little trouble achieving full occupancy.”

“The country’s economic growth is anchored by semiconductors, AI-linked manufacturing, data centres, and electrical exports. Those sectors all have one thing in common: they require land, land for factory space, logistics parks, and data centres. So expect significant trading in land near fast-growing industrial zones

“Residential property will not get as powerful a boost as industrial land and facilities, but it is already benefitting from this year’s growth surprise. In this strong growth, low inflation situation, people can confidently make long-term housing decisions. They can commit to a mortgage or upgrade their home for space to accommodate their growing families.

“One housing market segment will perform better than the others. Homes priced between RM300,000 and RM600,000 in suburban Kuala Lumpur, the Penang mainland, and Johor will be the best performers. These are investors and owner-occupiers upgrading or forming new households.

“Retail property gets a double boost,” Mr Ansari noted. “The ‘Visit Malaysia 2026’ campaign aims to attract 47 million tourists, while domestic consumption continues growing steadily. Both should lift sales at prime retail locations in tourist areas and major shopping districts. Well-located malls with good tenant mixes will outperform other malls.”

“The outlook is positive for office property, but not across the board like with the other property sectors. requires a more nuanced view. We still have an oversupply of office buildings, and that’s especially true in the Klang Valley. GDP growth will help tenants lease some of that vacant space, but we don’t expect office rents to climb higher.

“In the office market, the winners will be Grade-A, ESG-compliant buildings and offices serving technology, finance, and shared services companies. Older, poorly-located office stock will continue to struggle regardless of economic growth. For some of these buildings, the best option might be redevelopment or conversion to residential use.

“For all the reasons I have just discussed, real estate markets have the potential to be strong performers in 2026. And that performance will be a result of Malaysia’s economic growth surprise. Manufacturing, exports, tourism, and consumption have all pushed the economy to a faster rate of growth without also pushing up inflation. Good management by the government and Bank Negara has helped. For property, the result will be a year of opportunity across the industrial, residential, and retail sectors.”

— end of press release —

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