2025: A really bad year for non-property owners

Wealth gap could widen for those without homes

As we usher in 2025, Malaysia’s property market is on a bullish trajectory. However, while this spells good news for property owners and investors, it is shaping up to be a tough year for those who have yet to get on the property ownership ladder.

Let’s explore why this year might be a turning point for tenants and non-property owners—and why waiting any longer to invest could widen the wealth gap even further.

Setting the stage

The year 2024 marked the beginning of the property market’s recovery after the pandemic-induced slump. Several key factors contributed to this rebound:

• Low inflation and unemployment: Inflation remained at a modest 1.9%, while the unemployment rate dropped to its lowest since the lockdowns at 3.2%.
• Foreign direct investment (FDI) growth: Malaysia’s government actively pursued policies to attract foreign investment, bolstered by political stability and a weak ringgit, making Malaysian assets more appealing.
• Stable interest rates: The US Federal Reserve’s decision to cut interest rates by 0.25% helped usher in a lower-interest environment globally.

These factors collectively fuelled a surge in property transactions and higher rental rates. The National Property Information Centre (NAPIC) reported that property transactions reached record highs in Q1 to Q3 2024, with 311,211 units sold, valued at RM162.96bil — a 6.2% increase in volume and a 14.3% increase in value year-on-year.

Why 2025 could be worse for non-owners

With property prices and rentals on the rise, non-property owners face a growing challenge. In some areas, rental rates have increased by as much as 20% year-on-year. The Home Rental Index rose by 5.5%, reflecting sustained demand, especially in urban centres like the Klang Valley.

These rising costs are driven by several factors:

• Undersupply of New Launches: Developers have slowed the pace of new launches due to heightened scrutiny following recent structural issues, such as the sinkhole incident. This supply constraint is expected to persist for the next few years, driving rental demand higher.
• Rising Demand from Foreign Investors: With the ringgit at a historic low, foreign investors are snapping up properties in Malaysia, particularly in prime areas like KLCC, Bangsar and Bukit Bintang. This influx has increased rental yields, making it harder for local tenants to afford.
• Infrastructure Projects: The government’s ambitious infrastructure projects, such as Bandar Malaysia, will further boost property demand. KLCC Properties has been appointed as the master developer for this project and I anticipate that it will replicate its successful development model from Kuala Lumpur City Centre.

Economic stability driving confidence

Malaysia’s improving economic fundamentals continue to drive property investment. Household debt remains manageable at 70% of GDP while loan approvals for personal loans, vehicle financing and credit cards are at their highest levels in years.

This strong credit environment indicates that Malaysians are financially equipped to invest in property, despite rising prices. Personal wealth growth, coupled with a stable government and promising job market, provides further confidence.

NAPIC’s Q3 2024 data paints a clear picture of the market’s momentum:

• 112,000 property transactions in Q3 2024: This represents a 3% increase year-on-year.
• Total transaction value of RM57.3bil: Up 13.7% from Q3 2023.
• Residential sub-sector growth: Property sales reached 192,484 units valued at RM78.17 billion in Q1 to Q3 2024, marking a 4.9% and 6.9% increase, respectively.
• Overhang properties reduced by 15.2%: The total overhang dropped to 21,968 units, down from its peak in recent years.

Despite these gains, Kuala Lumpur, Perak and Johor respectively remain the states with the highest overhang units, highlighting that not all markets are equally buoyant.

Rental market trends

Rental rates have been steadily climbing, driven by increased demand and a constrained supply of new properties. In Klang Valley, rental yields have risen dramatically as workers return to the city post-pandemic and international tenants seek accommodation in prime locations.

The short-stay rental market, such as Airbnb, has also rebounded. Weaker ringgit values have increased domestic tourism, further driving demand for short-term rentals.

Based on current trends, the property bull run is expected to begin this year and continue beyond. Key predictions for this year include:

• Transaction volumes: Maintaining a 10% variance compared to the average of 2022–2024 transaction levels.
• Rental growth: Particularly in Tier 1 areas, where undersupply continues to push prices up.
• Property values: Anticipated to rise to their highest rate in four years.
• New launches: Expected to return to pre-pandemic levels as developers regain confidence.

Bad news for tenants

For tenants and those without property assets, 2025 looks set to widen the wealth gap further. Rising rental rates, increasing property values and constrained supply mean that the cost of not owning property will only grow over time.

With mega infrastructure projects like Bandar Malaysia set to transform the landscape and foreign investment continuing to flow into the country, the property market’s upward trajectory shows no signs of slowing down. Property ownership is no longer just about having a home—it is about securing financial stability and capitalising on Malaysia’s growth story.

For those still sitting on the sidelines, the window of opportunity is narrowing. The longer one waits to enter the property market, the more expensive and challenging it will become to catch up. In 2025, not owning property could be the biggest financial setback for Malaysians.

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‘Good year for property’

Frank Knight Malaysia's Wong said Johor is an obvious market that is expected to grow.

KUALA LUMPUR: The property market is poised for growth in 2025, with a significant focus on industrial property which will be underpinned by supporting government policies and increase in foreign direct investments (FDIs), says Knight Frank Malaysia executive director of research and consultancy Amy Wong Siew Fong.

The increase in FDIs will lead to a higher number of multinational companies opting to kick start operations and thus drive the economy.

Citing a recent report conducted by Knight Frank titled “Real Estate Highlights”, Wong said respondents had ranked data centres, industrial and logistics as the top three growing real estate investment sectors for 2024.

“Moving into 2025, the green light is for data centres, industrial and logistics, while office, hospitality and retail are rather stagnant,” she said during a panel session at the 18th Bursa-Hong Leong Investment Bank (HLIB) stratum focus series here yesterday.

She highlighted that aside from the Klang Valley, Johor is an obvious market that is expected to grow, especially considering the development of the Johor-Singapore Special Economic Zone (JS-SEZ) followed by Penang.

However, in terms of investment, Wong pointed out that despite the Iskandar region playing a huge role for the JS-SEZ, the market may not be as exciting as the Johor Baru City Centre area.

“If you are talking about the JS-SEZ, I think the industrial sector will continue to be a key sector to look at and manufacturers will continue to look into areas surrounding Senai and Kulai – which always have consistent demand due to its good fundamentals,” she said.

Wong said there has also been an increase in interest in the Sarawak and Sabah region, considering its strong drive towards the green agenda.

Asked about expected downside risks for the year, Wong said there are factors that are impossible to predict such as changes in policies and rate cuts.

“With all these chess pieces in place, I think 2025 is going to be a good year for the property market,” she said.

Sharing the same optimism, HLIB group managing director and chief executive officer Lee Jim Leng said affordability remains a key factor for the property market moving forward.

“In 2025, we are expecting higher wages for civil servants and the introduction of a higher minimum wage.

“The incremental increase in disposable income is a much welcome factor in catalysing demand and raising affordability for properties across the country,” she said, adding that the current 3% overnight policy rate and stable mortgage rates are also expected to bode well for the property sector.Positive indicators such as stable employment growth rate and an expected gross domestic product growth of 4.9% for 2025, are expected to provide the right conditions for sustained growth within the property sector.

According to the National Property Information Centre, Malaysia’s property transaction values soared to RM105.65bil in the first half of 2024, marking an impressive 23.8% year-on-year growth and the highest in five years.

As of the nine months of 2024, the number was noted to have increased to RM162.96bil.

The Kuala Lumpur Property Index has increased by 31.17% in 2024 and the residential overhang situation was noted to have improved, with a 12.3% reduction in volume of unsold properties.

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Heralding the Golden Age of Cryptocurrency

 ■ Presidentelect Donald Trump’s embrace of cryptocurrencies marks a pivotal moment

■ Analysts projecting Bitcoin to reach US$200,000 by end-2025

■ The outlook for Bitcoin and the broader crypto market is overwhelmingly positive, but risks remain

THE cryptocurrency world is buzzing with speculation that bitcoin could reach an unprecedented US$200,000 by 2025. While bitcoin has yet to stabilise around the US$100,000 mark, its meteoric rise in 2024 has emboldened investors and analysts to project a bullish future for the world’s leading digital asset.

Bitwise Asset Management, a prominent voice in the crypto sphere, has described the upcoming year as the Golden Age of Crypto.

According to the firm, the regulatory landscape in the United States has significantly improved following the 2024 US elections. President-elect Donald Trump’s embrace of cryptocurrencies marks a pivotal moment.

“We believe we are entering the Golden Age of Crypto,” Bitwise analysts, led by chief investment officer Matt Hougan and head of research Ryan Rasmussen, state in the group’s report.

Bitwise expects Crypto’s magnificent three – Bitcoin, Ethereum and Solanato – to hit new all-time highs in 2025, with bitcoin leading the rise to trade above US$200,000.

In addition to Bitwise, other analysts projecting bitcoin to reach US$200,000 include Geoff Kendrick, head of crypto research at Standard Chartered, and analysts at Bernstein, led by Gautam Chhugani.

Kendrick forecasts that bitcoin could hit this milestone by the end of 2025, driven by institutional investments in bitcoin exchange-traded funds (ETFS).

In a recent note, he stated that Standard Chartered’s target of US$200,000 by 2025 is “achievable”, adding: “We would become even more bullish if bitcoin experienced accelerated adoption by US retirement funds, global sovereign wealth funds, or the establishment of a potential US strategic reserve fund.

“We anticipate institutional flows to continue at or exceed the pace set in 2024. Microstrategy, for instance, is ahead of its Us$42bil threeyear plan, suggesting its purchases in 2025 will likely match or surpass those of 2024.”

Meanwhile, Bernstein’s analysts attribute their bitcoin price target of US$200,000 by end-2025 to unprecedented demand stemming from spot bitcoin ETFS managed by leading asset managers, according to media reports.

Trump effect

Essentially, crypto has emerged as a clear winner in the 2024 US elections, giving it a brighter regulatory outlook in the United States, Bitwise notes.

For one thing, Trump has announced plans to create a strategic bitcoin reserve and nominated Scott Bessent as Treasury Secretary. Bessent’s earlier comment that “crypto is about freedom and the crypto economy is here to stay” reflects the administration’s pro-crypto stance. The reshuffling of the Securities and Exchange Commission (SEC), which has historically taken a sceptical view of digital assets, adds another layer of optimism.

Similarly, Bernstein analysts attribute bitcoin’s rise to Trump’s support for cryptocurrencies. They point out that his plan to position the United States as a global leader in the crypto space and his choice of Paul Atkins, a known crypto advocate, to lead the SEC have bolstered market confidence.

Record highs

Bitcoin has since cooled to below US$95,000 at the time of writing, after reaching an alltime high of US$103,992 earlier this month.

This marks a 141.72% increase year-to-date as of Dec 6, 2024. According to Bitwise, the surge was largely driven by the US launch of spot bitcoin ETFS, which set records with Us$33.6bil in inflows within their first year.

Other crypto assets, including Ethereum and Solana, also posted substantial year-to-date gains of 75.77% and 127.71%, respectively. This performance highlights how cryptocurrencies, led by bitcoin, ethereum and solana, have outpaced all major asset classes in 2024.

Crypto equities mirrored this bullish trend. Companies like Microstrategy and Coinbase saw their shares skyrocket by 525.39% and 97.57%, respectively. In comparison, traditional assets such as the S&P 500 and gold returned 28.07% and 27.65% over the same period, highlighting crypto’s dominance.

Catalysts for next milestone

The factors driving bitcoin’s trajectory towards US$200,000 are multifaceted, Bitwise highlights. The launch of bitcoin

ETFS in 2024 shattered expectations, and Bitwise believes 2025 will see even greater inflows.

“When US spot bitcoin ETFS launched in January 2024, ETF experts forecast the group to see Us$5bil to Us$15bil of inflows in their first year. They passed the higher end of that range within the first six months.

“Since launching, the record-setting ETFS have gathered Us$33.6bil in inflows. We expect 2025’s inflows to top that,” Bitwise says.

Drawing a parallel with gold ETFS launched in 2004, Bitwise notes that ETF inflows typically accelerate in subsequent years.

“The best historical analogy we have for the bitcoin ETF launch is the launch of gold ETFS in 2004. Flows petering out would be unusual,” it explains.

At present, major financial institutions such as Morgan Stanley, Merrill Lynch, and Bank of America have yet to fully embrace bitcoin ETFS.

Bitwise anticipates this to change in 2025, unlocking a wave of institutional investments. “The trillions of dollars these firms manage will start flowing into bitcoin ETFS,” Bitwise predicts.

Risk tolerance

While bitcoin remains the focal point, other cryptocurrencies like Ethereum and Solana are also poised for substantial gains in 2025. Bitwise’s price targets for Ethereum and Solana are US$7,000 and US$750, respectively.

Ethereum, despite its impressive 2024 performance, has faced competition from fastergrowing programmable blockchains.

However, Bitwise anticipates a “narrative shift” as activity on

Layer 2 blockchains and spot Ethereum ETFS gain traction.

Solana’s resurgence, driven by memecoin mania in 2024, is also expected to continue as serious projects migrate to its network, it says.

Meanwhile, JP Morgan points out that the role of crypto in portfolio construction is mostly a function of risk tolerance.

“Cryptocurrencies are inherently unpredictable: there is little visibility into future price movements and blockchain technology, while exciting, also has few barriers to entry, meaning tokens can become obsolete (and therefore worthless) as new ones enter the market with improved functionality,” the US asset management company cautions.

“As a result, for most investors, any allocation to crypto in a portfolio should be kept both small enough to ensure that even in the event of a significant sell-off it does not derail overall portfolio objectives and well diversified,” it adds.

While the outlook for bitcoin and the broader crypto market is overwhelmingly positive, risks remain.

Regulatory clarity, though improving, is still a work in progress.

The global economic environment, including interest-rate policies and geopolitical tensions, could also impact investor sentiment.

However, the convergence of favourable regulatory developments, institutional adoption and technological advancements positions bitcoin as a strong contender to achieve new heights, potentially reshaping the global financial landscape.

By CECILIA kok cecilia_kok@thestar.com.my

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Equal opportunity in accounting

Rising support for gender diversity, inclusivity in profession

The importance of diversity and gender balance in professional fields, including accounting, has gained recognition in recent times.

The accounting profession, as a crucial component of the business world, said Association of Chartered Certified Accountants (ACCA) chief executive officer Helen Brand (OBE), greatly benefits from incorporating varied perspectives and experiences into its decision-making processes.

As one of the most influential voices in the profession, Brand, who was in Kuala Lumpur on Sept 6 for the 88th ACCA Anniversary Gala Dinner, sat down with StarEdu to talk about the evolving landscape of accountancy, particularly in relation to diversity, inclusion, and the future of work.

As of October 2024, women make up a substantial 62% of the accounting workforce in Malaysia, compared to 38% for men, according to ACCA’s member demographics.

“Diversity of thought and inclusive representation are not just moral imperatives – they are essential for driving better business performance and innovative solutions.

ALSO READ: Tackling inequalities

“Different perspectives can also lead to better solutions by avoiding groupthink and by ensuring a comprehensive understanding of customer needs,” Brand shared.

Brand, who is a founding member of the International Integrated Reporting Council (IIRC), is also a member of the United Kingdom government’s Professional and Business Services Council, and has participated in a number of trade advisory forums and university advisory boards.

Many businesses, she pointed out, are now committed to the United Nations Sustainable Development Goals (SDGs) due to increasing pressure from the public, governments and regulators, requiring them to demonstrate social inclusion alongside profitability.

SDG 5, she said, is one of the 17 SDGs that seeks to achieve gender equality and empower women and girls.

Brand

Gender equality is a basic human right and an essential factor for building a peaceful, prosperous and sustainable world, she added.

“It’s becoming increasingly important for businesses to show they include all parts of society in their workforce and have a positive impact.

“Inclusive slogans, however, must be backed up with tangible achievements.“Reporting on gender diversity in annual and integrated reports has become as essential as financial performance reporting,” she said, noting that companies excelling in gender diversity often see better financial results due to a broader talent pool that gives employers the biggest opportunity to recruit the best person.“Inclusion means recognising different attributes as equal, not lesser, and that’s what we can achieve by making sure that there’s equal representation with women,” she explained.

Brand emphasised that the UN SDGs play an important role, providing a clear framework to guide people’s actions and assess their progress.

The focus, she said, should not just be on financial performance.

“The ongoing discussion about sustainability, including the impact businesses have on people and the significance of human capital, is a major step forward, extending beyond the scope of the SDGs,” she said.

Gender diverse teams, said Universiti Tunku Abdul Rahman (UTAR) Faculty of Business and Finance Department of Commerce and Accountancy head Dr Sonia Johanthan, bring varied perspectives that enhance problem-solving and decision-making.

“In accounting, this means better risk assessments, financial planning, and client relations.

“Diversity also fosters creativity, which is critical for addressing complex client needs and adapting to evolving regulations in the accounting industry.

“According to a prior study, diverse board members often excel in building strong client relationships, leading to improved client satisfaction and retention, consequently increase in the firm’s value.

“The study also showed that organisations with gender diversity often outperform less diverse ones in profitability and operational efficiency,” she said.

Driving change

ACCA, said Brand, has made significant strides in promoting gender parity and broader diversity within its ranks.

“Of the 46 members on ACCA’s governing council, 26 are women, with the overall membership at 52% male and 48% female, which is nearing parity. The majority of our students are women,” she said, adding that this shift is not merely symbolic; it reflects a concerted effort to cultivate an inclusive culture and provide equal opportunities for professional advancement.

“It’s important to understand that driving diversity and inclusion is a cultural issue within an organisational business.

“Implementing systems and processes to support this culture doesn’t yield instant results; it takes time. For example, you may have a single woman on the board or at the executive level, but it does not make a difference when they’re in the minority, and their voice often isn’t heard.

“While one is better than none, achieving true diversity is a gradual process that requires continuous effort,” she said.

The real disparity, she said, is when women tend not to progress to more senior roles, despite having extensive educational and professional experience.

“In order to be a female leader, maybe about 30 years ago, you had to take on the attributes associated with men, because you had to show that you were strong, decisive, and could move things forward.

“Now, we understand that there are different styles of leadership that are equally valid, more consultative, collaborative, solutions focused, less driven by ego and more driven by outcomes, and this opens up possibilities to men and women who want to lead in a different way,” she said.

She added that it is essential for everyone to be on board and aligned to the organisation’s purpose to be a successful business, and one way to achieve this is by ensuring that every person feels supported and able to reach their full potential.

“Sometimes, interventions – whether through new laws or regulatory changes – can help drive the change that is necessary, because you need a shock to the system for it to change.

“For example, if things like board membership and leadership positions were left to develop organically, it might take many more years before we are able to reach parity,” she said.

Diversity in all aspects

Brand explained that while gender is a significant issue, particularly in some countries, there are many other important aspects of diversity that also need attention.

These include individuals from less privileged economic backgrounds, people of different ethnicities, and those with neurodiversity, as there are various ways in which certain groups have been excluded or not provided the same opportunities as others, both in society and in the workplace.

“There is a growing focus on the broader concept of diversity and inclusion, which ensures that everybody has the best possible opportunity to thrive,” she said.

She added that ACCA has implemented a range of initiatives to foster an inclusive environment and provide women with the tools and support they need to thrive, including offering specific training programmes to help women develop the confidence and skills to apply for roles they might not have considered before.

“We’ve also put in place flexible working arrangements that support both women and men in balancing their professional and personal commitments,” she said.

Alongside its diversity initiatives, she said, ACCA is also at the forefront of equipping its members with the competencies needed to navigate the profession’s evolving landscape, proving that diversity in skillsets is also valued.

“The integration of technology into the skillsets of professional accountants will become even more crucial moving forward.

“We’ve launched continuous professional development courses for members who are already qualified to make sure that they update their skills to remain relevant, and that covers top topics such as data science, data analytics, internal audit, new standards, and sustainability,” she said.

Brand believes that the profession’s ability to harness these technologies in an ethical and inclusive manner will be a defining factor in its long-term success.

“We need to ensure that the algorithms and data used are free from bias, and that the governance frameworks protect individual privacy and promote transparency.

“Accountants will play a pivotal role in navigating these complex ethical considerations,” she said.

Towards better support

“Gender bias still exists in the business world, although it has diminished over time.

The obstruction to career progression and professional growth for women is the challenge of a work-life balance, particularly for those with children. In a fast-paced and high-pressure environment of a professional accounting firm, long hours and constant change are the norm.

During my pregnancy, while working in Malaysia, I was reassigned from client work to the firm’s training centre in my third trimester, where I handled administrative tasks and facilitated in-house training.

When I returned from maternity leave, I was again given client assignments, which made me feel as though I was back on track with my career.

To empower and support women in the profession, firms need to offer greater flexibility in their work options.

This includes the possibility of working from home and flexible working hours. Additionally, firms should be transparent about career development opportunities by providing structured mentorship, professional development programmes, and clear paths to promotion.

This will help women accountants make informed decisions about their careers and achieve their ambitions.

By fostering an environment of support, firms can retain valuable talent and ensure that women can thrive in the profession.”– Sunway Business School Department of Accounting lecturer

Choo Sook Yin“The main issue lies in the persistent stereotype about women’s abilities, which limits their opportunities for growth.

In many Asian countries, where the workforce is predominantly male, the lack of female role models makes it more difficult for women to envision their own career progression.

The demanding nature of accounting roles can be especially challenging for women, particularly those juggling responsibilities in traditional households where they are expected to fulfil domestic obligations.

Additionally, women often face a networking gap, limiting their access to influential professional connections that are crucial for career advancement.

This underscores the need for focused efforts by firms, professional organisations and policymakers to support the career development and professional growth of women in accounting.

For example, the 2023 Global Gender Gap Index highlights Sweden as a leader in promoting gender equality, with high female educational attainment and robust parental leave policies.

Pregnant women in Sweden can take up to 390 days of maternity and parental leave, and women with children under eight are allowed to reduce their work hours by 25%. Such policies could help empower women, encouraging them to grow in their profession.”– UTAR Faculty of Business and Finance Department of Commerce and Accountancy head Dr Sonia Johanthan

Women at the fore

The recent appointment of Datuk Zaiton Mohd Hassan (pic) as vice president of ACCA marks the first time that women have held all three officer posts simultaneously in the global professional accountancy body, founded in 1904.

Zaiton joins fellow senior officers Ayla Majid, president and sustainability strategist from Pakistan, and deputy president Melanie Proffitt, from England, who is the chief financial officer of Farncombe Estate, a hotel group.

Together, they represent more than 252,500 members and 526,000 future members across 180 countries, a press release dated Nov 18 read.

Zaiton is the chief executive officer of the Malaysia Professional Accountancy Centre (MyPAC), a non-profit dedicated to helping students from poorer backgrounds pursue careers in finance. She also holds senior non-executive director positions, including chair of GX Bank, Malaysia’s first digital bank.

She was elected to ACCA’s Council in 2016 and previously served as president of the ACCA Malaysia Advisory Committee. Additionally, she has served as deputy chair of the International Federation of Accountants (IFAC) Professional Accountants in Business (PAIB) Committee.

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