PETALING JAYA: The property market remains broadly attractive to investors despite prevailing geopolitical uncertainties, say experts.
However, they have cautioned that the ongoing conflict in the Middle East has introduced additional layers of risk that warrant a more selective and disciplined investment approach.
Zerin Properties chief executive officer Previn Singhe said Malaysia’s property market remains fundamentally resilient despite the Iran conflict.
“The sector continues to be driven by domestic fundamentals such as population growth, urbanisation, infrastructure development and genuine end-user demand.
“Unless the conflict escalates significantly, I do not see a broad-based weakening of the market,” he told StarBiz.

Previn points out that periods of global uncertainty tend to actually “reinforce the appeal of real assets”, adding that Malaysia remains a relatively stable and defensive market in the region.
“The bright spots remain clear. Industrial and logistics will continue to lead, supported by supply chain diversification, manufacturing activity and demand for modern facilities.
“Data centres and tech-related assets are emerging as a structural growth pillar, largely insulated from external shocks.”
For the residential sector, Previn said the mid-market segment will remain “the most resilient”. “These will be well-located homes and high-rise units within mature urban and suburban areas with good connectivity, especially those within integrated developments.
“This is where genuine owner occupier demand sits, providing stability to the broader market. In contrast, higher-end segments remain more sensitive to sentiment and liquidity.”
Prime offices, selected retail and mixed-use developments in established urban corridors should also remain stable, said Previn, while healthcare and education related assets will continue to offer defensive characteristics.
“From an investment standpoint, the approach remains the same; stay selective, focus on sectors with structural demand, and take a long-term view,” he said.

Olive Tree Property Consultants founder and chief executive officer Samuel Tan said the ongoing Middle East conflict presents “a complex landscape” for the Malaysian property market.
While geographically distant, the economic “ripple effects” are significant. The impact is characterised by a “wait-and-see” sentiment, rather than a total collapse.
“Malaysia is currently in a unique position. It is an oil-exporting nation, which provides a fiscal cushion that many of its neighbours lack.”
Tan believes that the residential sector is anticipated to have a short-term cooling period in transaction volume.
“High-end and luxury segments (often reliant on foreign or high-net-worth investors) may see a temporary freeze as the cautious sentiment prevails.
“However, the mid-tier market (RM300,000 to RM700,000) remains supported by domestic demand and stable employment.”
Tan, meanwhile, said the commercial and industrial sectors continue to be bright spots for the local property market.
“Malaysia’s data centre boom and industrial growth is expected to remain resilient.
“Logistics and industrial properties may actually see increased interest as companies look for stable ‘neutral’ hubs outside of the immediate conflict zones.”
Tan said the biggest risk will be “imported inflation”. “If oil prices remain elevated, construction costs (steel, cement, transport) will rise.”
An analyst said elevated global oil prices will translate into higher construction and material costs, potentially compressing developer margins and delaying project timelines.
“In parallel, heightened macroeconomic uncertainty may exert downward pressure on the ringgit, dampen investor sentiment and tighten financing conditions.
“These factors could, in turn, moderate transaction volumes and constrain demand, particularly within higher-priced or investment-oriented segments.”
For investors and homeowners, Tan said the current volatility creates specific “windows” of opportunity.
“Investors need to target safe haven assets. Focus on completed residential units in prime areas (Mont Kiara, KLCC, Bangsar) or established industrial zones (such as Johor and Penang).
“In times of global uncertainty, “bricks and mortar” in a neutral, energy-rich country like Malaysia often attracts capital flight from more volatile regions.”
Tan also said investors should “lock-in” financing early if they are currently looking to buy.
“Secure the mortgage rates now. While interest rates have been stable, the global trend toward higher-for-longer rates means the “cheapest” money may be available today rather than six months from now.”
Tan added that a fluctuating ringgit can also make Malaysian properties cheaper, especially for those holding US dollar or Singapore dollar-denominated currencies.
“If you have access to foreign currency, the exchange rate discount could outweigh any local price stagnation.”
Conflict escalation
If the conflict in the Middle East were to escalate, Previn believes that the ripple effects on Malaysia’s property market will be “indirect but clearly felt.”
“The key is to distinguish between sentiment driven reactions and underlying fundamentals.”
Previn said investor sentiment is likely to be the most immediate “pressure point.”
“In periods of heightened uncertainty, capital tends to pause rather than exit, leading to short term caution especially in segments with existing supply overhang.
“That said, if escalation disrupts Middle Eastern investment flows, some of that capital could be redirected into more stable Asean markets like Malaysia, which may provide support to selected high end segments.”
From experience, Previn said these cycles tend to create short term dips rather than structural declines, often followed by a recovery as confidence returns.
“It is also worth noting that Malaysia has a natural buffer. As a net energy exporter, higher oil prices can support government revenues and sustain infrastructure spending, which in turn underpins property values in key growth corridors.
“Overall, while escalation introduces real transmission risks, it is unlikely to derail the market. The impact will be cyclical rather than structural. For investors, the focus should remain on fundamentals, location quality, income resilience and prudent leverage.”
Amid the cautious outlook, Tan said investors should pivot into defensive investments.
“Look into real estate investment trusts (REITs) that focus on industrial and retail assets. These are more liquid than physical property and provide a hedge through consistent dividend yields.”
Tan said the ongoing conflict in the Middle East, if it’s prolonged, will have three “distinct phases.”
“The first phase (which typically lasts one-to-three months) is the “shock phase”. We are currently here. Expect high market volatility, paused investment decisions and sharp fluctuations in energy prices.”
Meanwhile, the second phase (six-to-12 months) will be the “adjustment” period.
“If the conflict becomes a “war of attrition” or moves toward a new political status quo in Iran (regime-change efforts), markets will begin to price in the “new normal.”
“Supply chains will reroute and Malaysia’s trade surplus from oil will likely strengthen its fiscal position.”
The final phase (lasting 18 months or more) is the “recovery” stage, said Tan.
“Historically, property markets recover once interest rate paths become predictable.
“If the conflict remains localised and does not expand into a global confrontation, a rebound in the Malaysian property can only be expected by mid-to-late 2027.”
Opportunities amid uncertainties
For now, Tan said the Malaysian property market is seeing a distinct “decoupling” effect.
“While traditional sectors remain cautious due to geopolitical tensions, industrial and tech-related real estate are experiencing a generational boom.”
Tan said investors should focus on certain “primary hotspots” and “investment themes” if they want to leverage the current situation.
Among these hotspots is the Johor-Singapore Special Economic Zone (JS-SEZ), he said.
“Johor is currently the most dynamic region in Malaysia. The official JS-SEZ Masterplan launch, scheduled for March 30, 2026, is a major catalyst.”
Tan highlighted that there will be frictionless border policies (including seven-second artificial intelligence (AI) e-gates and special visas) which will effectively merge Johor’s land availability with Singapore’s capital.
“There will be a residential spillover. Look at high-end rentals in Puteri Harbour and Eco Sentral. The influx of tech professionals and regional managers is driving a rental-hike phase, which often precedes capital appreciation.”
Additionally, Tan said the AI and data centre corridors are also something to watch out for.
“Malaysia has surpassed Singapore as the primary data center hub in Asean. This is no longer just a trend - it is a fundamental shift in land value.
“Some of the key locations are Sedenak (Johor), Cyberjaya and Bukit Raja (Klang Valley). The opportunity is in industrial spaces within these areas and they are being repriced for “high-density power” use.”
Tan emphasised that the investment strategy is to focus on REITs that hold data center assets or industrial parks with pre-negotiated power and water quotas.
“Note that Johor has recently placed a moratorium on traditional water-intensive data centres, making green-ready sites extremely scarce and valuable.”
Tan also noted that Penang is transitioning from a basic assembly point to a high-end chip design and research and development hub - anchored by the National Semiconductor Strategy.
“Some of the key locations are Batu Kawan Industrial Park and Bayan Lepas.
“Recent major investments, such as the chipbond technology facility in Val d’Or (a residential neighbourhood within the city of Seberang Perai) are bringing in thousands of high-income engineers.”
Tan further explained that industrial land in neighbouring Kedah (Kulim Hi-Tech Park) is a more affordable “catch-up” play for those priced out of Penang island.
“With the 13th Malaysia Plan emphasising a “digital-ready society,” logistics real estate is benefiting from the e-commerce and “China+1” supply chain shifts.
“Some of the key locations are Rawang and Bandar Enstek (Negeri Sembilan). These areas are being developed as “halal hubs” and “cleantech” centres. Their proximity to KLIA and the Port Dickson smart container port (slated for 2026 / 2027) makes these areas prime for long-term capital growth,” he said.
