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Henry Butcher Malaysia
JULY - SEPTEMBER 2025
AS WE NAVIGATE FROM THE MIDPOINT OF 2025, MALAYSIA’S PROPERTY AND ECONOMIC LANDSCAPE REFLECT A MIX OF CALCULATED STRATEGIES AND COUNTER MEASURES AGAINST THE PREVAILING MARKET CONDITIONS.
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KDN PP18893/11/2015(034373)
alaysia’s property market concluded Q1 2025 in a tapered fashion with NAPIC’s statistics showing the country’s transactional volume and value easing by 6.2% and 8.9% respectively compared to the corresponding period last year. Out of the official data however were some silver linings such as the serviced apartment overhang inventory declining by 6.7% in volume and 6.9% in value of transactions compared to the preceding quarter in 2024, and shopping centres occupancy improving to 79.0% from 78.8% in Q4 2024. The declining trend was then met by a slight uptick in the country’s economy, specifically the 4.5% GDP growth, sustaining from the 4.4% recorded in Q1 2025. The modest improvement is driven by domestic demand and steady manufacturing which helped offset the weaker exports. But despite the 3.5% y-o-y drop in exports in June, Malaysia’s services sector grew by 5.3% as manufacturing rose by 3.8% (source: Reuters). Elephant in the Room But as global trade has been impeded by Trump II administration’s tariffs announced on USA’s Liberation Day on 2 April, its consequential impact has not unfolded completely as yet since it was paused for 90 days beginning 9 April to
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8 July with baseline tariff moved to 10% for all trading partners except China. The pause was further extended to 1 August but Malaysia had already received its official tariff rate of 25% on 7 July together with other neighbouring Asean countries like Indonesia, Thailand, Myanmar, Laos, Cambodia, Vietnam including Japan and South Korea. This latest round of reciprocal tariffs, which is set to take full effect from August, has cast a long shadow over Malaysia’s export-reliant economy. In particular, the 1% increase to 25% was imposed in spite of Malaysia’s trade mission to the US led by the Ministry of Industry & Trade to negotiate for a better deal.
Long Tian Chek
Whilst these duties may be irrelevant to the non-export market, they have unsettled players from the electronics, palm oil and rubber sectors where Malaysia has traditionally enjoyed a competitive edge in the US market. Amidst the pointed treatment, especially when compared to Vietnam’s and Indonesia’s renegotiated rates of 20% and 19% respectively, Putrajaya has expressed its non-retaliation decision, preferring instead for quiet diplomacy and behind closed doors negotiations.
announcement this year have continued on with their cautionary stance as they brace for more potential disruptions especially on the US-bound shipments. This is expected to put more pressure on their business and force them to be more innovative, looking beyond the conventional trading partners for new opportunities. Market diversification and re-routing of supply chains as such is inevitable and the beneficiaries from such strategies could lead to increased trade volumes with the Asean countries, China and the Middle East.
So while negotiations continue to take place away from the media’s radar, Malaysian exporters which have already been rattled from the first tariff
Noting the uncertainties surrounding Malaysia, Bank Negara Malaysia had on 9 July 2025 (just a day after the latest reciprocal tariff announcement)