OPR cut boosts property buyer confidence in Malaysia
He noted that while the rate adjustment is a positive step, changes in consumer behaviour and market dynamics usually take time to materialise. 'This adjustment could mark the beginning of a more accommodating phase to support Malaysia's economic resilience,' Soh said.
The OPR reduction to 2.75 per cent, announced on July 9, is the first adjustment since 2023. This move is seen as a pre-emptive measure to sustain economic growth amid moderate inflation while lowering borrowing costs.
Soh explained that the lower OPR would ease financial burdens for homebuyers, making loans more affordable and repayments more manageable. 'Buyers who were on the fence due to steep mortgage costs may now see a realistic path to owning a home,' he said.
The rate cut, combined with initiatives like the Housing Credit Guarantee Scheme, could encourage hesitant buyers to re-enter the market. Soh highlighted that mid-range and affordable housing segments are likely to benefit the most, with potential spillover effects on the high-end market as upgraders and investors take advantage of better loan terms.
Developers offering value-driven properties in well-connected locations are expected to capitalise on this momentum. 'Improved buyer sentiment and financing conditions may lead to an uptick in bookings and sales,' Soh added. - Bernama
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The Star
a day ago
- The Star
Malaysian industries can breathe easier now
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Although the six percentage point reduction may seem modest, it is significant for industry players, especially for sectors operating on thin margins or those competing in price-sensitive global supply chains,' said Soh. 'The reduction enhances the overall cost competitiveness of Malaysian-manufactured goods in the US market and serves as an important signal of improved bilateral trade relations. 'While some may argue that the impact on Malaysian exporters could be limited because US importers bear the tariff cost, the FMM believes that the burden of tariffs is often shared across the supply chain. 'Therefore, a reduction in tariffs benefits not only Malaysian exporters but also US importers. It improves the overall cost equation and can stimulate demand for Malaysian goods, especially in sectors where price plays a crucial role in purchasing decisions,' he added. Soh said that while it is still early to assess the full extent of the impact of the tariff rate cut, the FMM anticipates that several export-oriented industries, including electrical and electronics (E&E), machinery and equipment (M&E), rubber-based products and processed industrial goods, may benefit from improved competitiveness and increased demand. 'The FMM expects that any changes in export volumes in the short term may be gradual. 'While some front-loading of orders may have occurred earlier, the tariff cut is likely to encourage more exporters to consider taking on new orders going forward,' he said. 'Manufacturers are mindful of the current volatility in global markets, including ongoing supply chain disruptions and are expected to factor these considerations into their planning and responses to future shifts in market demand,' he added. Malaysian Semiconductors Industry Association Malaysian president Datuk Seri Wong Siew Hai said the 19% rate has levelled the playing field as several Asean countries are now at 19%. He noted that Malaysia can draw on its strong position in the semiconductor space. 'We have a strong industrial ecosystem, good supply chain, multinational companies with over 50 years of experience, strong infrastructure and talents. 'It puts Malaysia in a good light for investments,' said Wong, adding that its position as a neutral non-aligned country as well as its performance as Asean chair also works to its advantage. Malaysian Furniture Council president Desmond Tan said the reduction from 25% to 19% is positive news for the industry as the United States remains Malaysia's number one export destination. 'Hopefully, these latest tariffs can reduce uncertainty; however, exporters will still need to adapt to a higher-cost trade environment, and continued support from the government remains valuable,' he said. He said that given the United States' position as Malaysia's top export destination, any policy shift within that market would directly impact the industry's performance. The Medical Device Manufacturers Association (Perantim) President Johari Abu Kasim said the new tariff of 19% puts Malaysia at par with its key neighbours, especially countries that manufacture medical devices like the Philippines, Thailand and Indonesia. 'Export to the United States remains competitive, robust and commands high demand from the importers,' he said. He said Perantim's stance is that Malaysia needs to continuously seek new markets in Europe, Africa, BRICS, and capitalise on the lucrative Asean market. 'There are over 200 other countries besides the United States with populations over 7.5 billion people and export promotion needs to be geared up. Medical devices are a necessity in any country,' he said. While Malaysian pharmaceutical products are exempted from the tariff, there was no mention of medical devices. Malaysia's medical device exports to the US were valued at RM13.69bil (US$3.07bil) in 2024, making up 36.97% of the country's total medical device exports, which stood at RM37.03bil. Malaysia's trade with the US grew 10.8% year-on-year to RM27.32bil. Exports expanded by 4.7% to RM16.28bil on strong demand for E&E products, processed food and non-metallic mineral products. For the first half of 2025, trade with the United States grew by 32.6% to RM186.62bil. Exports continued their upward trend by recording double-digit expansion of 28% to RM111.59bil on growing exports of E&E products, processed food as well as machinery, equipment and parts.
The Star
2 days ago
- The Star
US tariff reduction a significant move for Malaysian industry's margin, says FMM
KUALA LUMPUR: A national business group has called the decision by the United States to reduce tariffs on Malaysian imports from 25% to 19% a 'modest but significant' one for local industry. Federation of Malaysian Manufacturing (FMM) president Tan Sri Soh Thian Lai lauded the move as a timely and strategic one, particularly in the current global trade environment. 'Although the 6% point reduction may seem modest, it is significant for industry players, especially for sectors operating on thin margins or those competing in price-sensitive global supply chains. 'The reduction enhances the overall cost competitiveness of Malaysian-manufactured goods in the United States market and serves as an important signal of improved bilateral trade relations,' he said in a statement on Friday (Aug 1). While some may argue that the impact on Malaysian exporters could be limited because United States' importers bear the tariff cost, Soh believes that the burden of tariffs is often shared across the supply chain. 'Therefore, the tariff reduction benefits not only Malaysian exporters but also importers from the United States, as it improves the overall cost equation. 'It can also stimulate demand for Malaysian goods, especially in sectors where price plays a crucial role in purchasing decisions,' he said, adding that the revision is expected to support export growth, improve market access and further strengthen the longstanding economic ties between both countries. He said FMM anticipates that several export-oriented industries, including electrical and electronics, machinery and equipment (M&E), rubber-based products and processed industrial goods, may benefit from improved competitiveness and increased demand. "This move also comes at a critical juncture and FMM hopes it will pave the way for further easing of trade barriers and deeper collaboration under frameworks such as the Indo-Pacific Economic Framework," he said. Malaysia will now face a 19% tariff on exports to the United States, reduced from the previous 25%, under an executive order signed by United States President Donald Trump. The new tariff structure takes effect in seven days and applies to goods entering the US for consumption, with limited exceptions for shipments already in transit. Signed on July 31, 2025, the order amends Executive Order 14257 and imposes revised ad valorem duties on multiple trading partners, including all major Asean nations. Under the latest tariff list, Malaysia, Thailand, Indonesia, the Philippines, and Cambodia each face a 19% rate. Vietnam faces a 20% tariff, while Brunei is listed at 25%. Laos and Myanmar are hit with the highest rate at 40%.
New Straits Times
2 days ago
- New Straits Times
US tariff cut a boost for Malaysian exporters, says FMM
KUALA LUMPUR: The revised United States (US) tariff of 19 per cent on Malaysian goods may seem modest but it marks a significant boost for Malaysian exporters navigating increasingly competitive and cost-sensitive global supply chains. Federation of Malaysian Manufacturing (FMM) president Tan Sri Soh Thian Lai said FMM views this decision as a timely and strategic move, particularly in the current global trade environment. "Although the six-percentage point reduction may seem modest, it is significant for industry players, especially for sectors operating on thin margins or those competing in price-sensitive global supply chains," he said in a statement. Soh said the reduction enhances the overall cost competitiveness of Malaysian-manufactured goods in the US market and serves as an important signal of improved bilateral trade relations. While some may argue that the impact on Malaysian exporters could be limited because US importers bear the tariff cost, he said FMM believes that the burden of tariffs is often shared across the supply chain. "Therefore, a reduction in tariffs benefits not only Malaysian exporters but also US importers. "It improves the overall cost equation and can stimulate demand for Malaysian goods, especially in sectors where price plays a crucial role in purchasing decisions," he said. Meanwhile, Soh said the tariff revision marks a meaningful step toward fostering more balanced and mutually beneficial trade relations between Malaysia and the US. He added that this is expected to support export growth, enhance market access and further strengthen the longstanding economic ties between the two countries. While it is still early to assess the full extent of the impact, Soh said FMM anticipates that several export-oriented industries may benefit from improved competitiveness and increased demand. This includes electrical and electronics, machinery and equipment, rubber-based products and processed industrial goods. FMM expects that any changes in export volumes in the short term may be gradual. "While some front-loading of orders may have occurred earlier, the tariff cut is likely to encourage more exporters to consider taking on new orders going forward. "Manufacturers are mindful of the current volatility in global markets, including ongoing supply chain disruptions and are expected to factor these considerations into their planning and responses to future shifts in market demand," Soh said.
