KUALA LUMPUR: Budget 2025 emphasised people-centric infrastructure and sustainability that aligned with global real estate trends such as green building practices and transit-oriented developments, said Knight Frank Malaysia.

In a statement, it said the strengthening of the ringgit will further reinforce confidence among foreign investors to invest in Malaysia's real estate market, making it a more attractive destination.

"These investments will act as a catalyst for property market growth, boosting both residential and commercial demand and enhancing long-term property values," it said.

According to Knight Frank, key projects like the expansion of the North-South Expressway, Johor-Singapore Rapid Transit System (RTS), Penang International Airport, and Klang Port are expected to enhance connectivity while widening roads at Lingkaran Pulau Indah and Pelabuhan Utara Klang drive real estate growth in key areas.

It said this will spur demand for both residential and commercial developments and bolster long-term property values.

In addition, the real estate agent and property manager said introducing tax incentives for flexible working arrangements is expected to reshape demand in the commercial real estate sector.

"The government's focus on high-value sectors such as electrical and electronics (E&E) and artificial intelligence (AI), supported by investment tax incentives, will likely create opportunities for the industrial real estate sector, especially in developing smart logistics and tech-driven industrial parks.

"We anticipate increased interest in logistics hubs and manufacturing facilities as Malaysia continues to grow its digital and high-tech sectors," it said.

Meanwhile, Knight Frank said the substantial budget allocations for Sabah and Sarawak aimed to reduce development disparities, with the airport expansions in Tawau and Miri boosting tourism and commercial activity, increasing demand for hospitality and retail properties.

"Additionally, the Sarawak Cancer Centre highlights investment in healthcare infrastructure, opening up opportunities in healthcare-related real estate," it added.