Sabah, Sarawak allocations in Budget 2025 could drive RM25 bil in economic activity and 10% home price growth, says Juwai IQI

• Juwai IQI co-founder and group CEO Kashif Ansari: “For the real estate market, the doubling of the special grants is a positive factor that will improve accessibility, increase property values, attract new development, and drive higher economic growth and quality of life.”

KUALA LUMPUR (Oct 18): Putrajaya’s allocation of RM6.7 billion for Sabah and RM5.9 billion for Sarawak for their infrastructure development could translate into RM18.9 billion to RM25.2 billion in total economic activity.

Such new economic activity in the two states could then lead to a 5% to 20% increase in home prices.

This is the view of Juwai IQI co-founder and group CEO Kashif Ansari (pictured): “The growth potential will be higher in locations that benefit most directly from new infrastructure.

How do we calculate that? We simply applied a RM1.50 to RM2.00 multiplier effect to every RM1 spent on infrastructure. Such projects usually directly create more economic activity than is represented by the direct spending in building the project.”

Kashif explained that home price appreciation can vary widely by location. In areas with significant infrastructure improvements, real estate values might increase by 5% to 20% over a few years.

“If we assume a 10% increase in property prices, this infrastructure spending could lead to a rise in the median home price in Sabah of RM39,000, from the current median of RM390,000 to a new median price of RM429,000,” he told EdgeProp.

“This multi-billion-ringgit investment in development will boost infrastructure like roads, electricity, and water.

“For the real estate market, the doubling of the special grants is a positive factor that will improve accessibility, increase property values, attract new development, and drive higher economic growth and quality of life,” he told the property portal.

“Infrastructure is necessary for economies and real estate markets to thrive. Without roads, water, and electricity, it is very difficult to provide quality, affordable housing to a community. If every house had to install its own equipment to generate electricity and purify water and had to build its own roads, housing would be impossibly expensive.

“Infrastructure investment directly correlates to GDP growth. Infrastructure is the new asset class in the modern economy, he added.

Looking at the market in Sarawak “we see clearly that demand is strongest for affordable homes and suburban developments. There are also buyers for larger landed properties such as semi-detached, terrace, and detached homes. Buyers seek value for money, larger spaces, and access to infrastructure such as roads and green spaces. That’s why suburban housing is popular,” revealed Kashif.

“In Sabah, housing demand is climbing. We see strong interest in landed properties, particularly in suburban areas where value is greater and prices are more affordable.

“Homes priced below RM300,000 are the most in-demand, as is true across the country.

“In both states, the combination of affordability and improving infrastructure is expected to sustain and increase buyer demand throughout 2025,” he added.

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