The newly imposed 24% tariffs by the United States on Malaysian exports are expected to present short-term challenges to the economy, with ripple effects across banking, manufacturing, and property industries. Despite the postponement of full tariff deployment for 90 days, the general fear of impending recession is growing today.
While certain export-driven sectors may face headwinds, Malaysia’s strong fundamentals, bolstered by a diversified economy and growing FDI from global supply chain diversification are expected to keep the property sector on steady footing.
Still, the knock-on effects will be felt across banks, developers, and ultimately, homebuyers.
Importantly, Malaysia could emerge as a net beneficiary from the global realignment of supply chains.
With other nations facing even steeper U.S. tariffs, particularly China and select ASEAN neighbours, Malaysia is quickly being viewed as a lower-risk, cost-effective alternative for businesses looking to relocate or diversify operations.
This trend could trigger increased foreign direct investment, job creation, and greater housing demand, especially in key industrial corridors like Johor, Penang, and Greater Klang Valley, coming from both US and China companies.
“Will the property market crash because of Trump’s tariffs? Are we heading for a recession?” said Faizul Ridzuan, CEO of FAR Capital.
“There’s definitely going to be uncertainty and speculation, and globally some countries might even be pushed into a forced recession. For Malaysia, a full recession is unlikely but a slowdown is coming. Over the next six to nine months, we’ll see a slight increase in costs, especially in construction, which could push home prices higher. The biggest worry today will be people fearing a recession could happen and tighten their belts. Generally, market activity will slow, people will hold off on buying, and fear will dominate decisions.”
Faizul added that while developers and consumers may hesitate, banks will likely react first.
“Let’s be real, banks will be the first to react. Banks have always been vultures who want to make the most without taking any risks. They’ll get very conservative on lending, and that’s what will actually make the slowdown worse. We expect this shift to hit hard within the next three to nine months.”
Yet, amid the noise, there is potential upside.
“If the slowdown deepens, interest rates could drop as governments try to stimulate spending. So while there may be fear, there’s also opportunity, especially for serious, financially prepared buyers. Prices won’t crash, but sentiment will stall. Rental will be on the rise due to favourable FDIs, low unemployment and lack of new supply. The genuine smart guys will be aggressively buying in the next three to six months.”
FAR Capital advises homebuyers to stay informed and ready, especially in high-potential areas such as Greater Klang Valley, Johor, and Penang, where infrastructure and employment trends remain strong despite macroeconomic headwinds.
“At FAR Capital, we’re helping our clients prepare, not panic. This was similar to COVID led recession in 2020. Once the fear is gone, markets will be back stronger than before. Fear-driven stagnation opens doors for those who are strategic. This is how wealth is built during times of uncertainty,” Faizul emphasised.
FAR Capital is Malaysia’s leading online property purchase platform with over 30,000 clients, focused on helping Malaysians achieve financial freedom through strategic real estate acquisition. With a data-driven approach and a mission to democratise property investment, FAR Capital has helped thousands of clients build profitable property portfolios across Malaysia.
