The Home Ministry has revealed there are about 20,000 applications from agents even before the official start of the programme.

Will the golden visas lure more businesses and high investments to the nation?

By Joseph Wong

When Home Minister Datuk Seri Hamzah Zainudin announced the new Premium Visa Programme (PVIP) to attract global tycoons into Malaysia, eyebrows were raised. There was certainly a mixed batch of reactions but as the deadline closes in on the starting date of the golden visa programme, more and more people are sitting up and paying attention.

While the targeted number of 1,000 immigrants is not a big one, Malaysia will be competing with other countries’ golden visas like neighbours Singapore and Thailand as well as European countries like Portugal and Spain. 

Initially, several nay-sayers were pointing out that the PVIP would cannibalise the Malaysia My Second Home (MM2H) Programme but the potential response to the PVIP has been positive.  

The Home Ministry has revealed that there are about 20,000 applications from agents even before the official start of the programme. On the other side of the coin, developers are certainly welcoming the move as it gives them the opportunity to sell their premium products. 

“This PVIP, which allows participants to buy property in Malaysia, benefits Mah Sing's developments in the Klang Valley (M Oscar, M Vertica, and Icon Mont Kiara), Northern (Ferringhi Residence 2), and Southern (Meridin Medini 1 & 2 Retail and Meridin Bayvue Retail). 

“We also hope that this programme will attract more foreign direct investment (FDI) to the country and create job opportunities for Malaysians, thus further strengthening the value of the Malaysian Ringgit,” said Mah Sing founder and group managing director Tan Sri Leong Hoy Kum.

"We are well aware that the upcoming Budget 2023 announcement will continue to prioritise the welfare of Keluarga Malaysia (the Malaysian Family), while also preparing the country for a more challenging global economic crisis next year. As a Malaysian property developer, Mah Sing supports the government's initiative to make home ownership more accessible to Malaysians, particularly first-time buyers. Mah Sing hopes that more goodies will be announced in the upcoming Budget 2023 on October 7," said Leong.

Juwai IQI group co-founder and chief executive officer Kashif Ansari is also positive about the PVIP, saying that he believes it will likely succeed in attracting its target of 1,000 in its first year.

“PVIP opens the door to wealthy migrants with attractive terms that clarify any uncertainties they may have had after the recent reform of the Malaysia My Second Home programme,” he said.

“The programme is open to foreigners with sufficient overseas income and assets to make them net contributors to society and the economy. The PVIP launch is the latest step in transforming Malaysia’s immigration policy from quantity to quality.

“The conditions are not demanding, and the benefits of living in Malaysia under a long-term visa are very attractive. Foreigners want to be able to live and work here, send their children to the local international schools, and not have to worry about renewing their visas every six or 12 months,” said Ansari.

China is likely going to have the biggest number of potential candidates for the PVIP. Chinese investors continue to choose Malaysia as a real estate investment destination because of the slowdown in the country's real estate market, which is encouraging more of their money to be invested abroad, particularly in South-East Asia. 

Malaysia is geographically proximate, affordable and offers an appealing lifestyle to buyers from China, especially in the colder north. The top nationalities participating in the PVIP will include Japanese and other Asian nationalities, then Europeans, North Americans, and the Gulf nations.

The Asian Real Estate Technology Group highlighted that with a projected 5.5% GDP growth for the entire year 2022, Malaysia's economy is expected to rebound quickly from the pandemic.

According to the official pre-Covid statistics for the MM2H visa, which is differHient to the PVIP, Chinese citizens made up about 31% of participants. Japanese accounted for about 11% of MM2H participants, Bangladeshis 10%, and UK citizens 6%.

According to data by the National Property Information Centre (Napic), more than 188,000 property transactions worth RM84.4bil were recorded in the first half of 2022 (H1 2022), reflecting an increase of more than 30% in volume and value compared to the same period last year as all sub-sectors recorded year-on-year growth.

In the time period under review, the residential property sector recorded 116,178 transactions totalling RM45.62bil, an increase of 32.2% in value and 26.3% in volume year over year. A little over 47% of the entire residential volume in the country was absorbed by the four major states of Penang, Kuala Lumpur, Johor, and Selangor.

Additionally, according to Napic, less than 10,000 newly constructed homes were documented in H1 2022, a decrease of 66.7% year over year. The number of new launches decreased by 13.3% when compared to H2 2021.

According to the report, terraced residences made up 68.2% of the new debuts. In comparison to the 20.6% in H1 2021 and the 28.1% in H2 2021, the sales performance for new launches in H1 2022 was registered at 20.3%.

According to Napic data, the situation of property overhang has improved as a result of the market recovery. 34,092 overhang units totalling RM21.73 billion were recorded, which is a decrease of 4.6% in value and 7.5% in volume when compared to H2 2021. With 6,040 units totalling RM4.73 billion, Johor has the majority of the overhang.

IQI has continued to grow due to its technology and global reach, said Kashif.

“We also hope that this programme will attract more foreign direct investment (FDI) to the country,” said Leong.

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