Five Non-Negotiables for Strong Returns in Kuala Lumpur; Why Arte Star Stands Out

As Kuala Lumpur cements its role as a regional financial and tourism powerhouse, property investors are becoming more selective – prioritising developments that deliver not just location but also connectivity, lifestyle appeal and sustainable rental yields.

Despite economic cycles, property remains one of the most reliable long-term investment assets. However, experienced investors know that choosing the right development is key to achieving strong rental returns and long-term appreciation. The following five factors are often considered essential when evaluating a property investment. 

Location still reigns supreme, according to industry experts.

While property remains a resilient long-term asset class across economic cycles, seasoned investors understand that returns are driven less by timing the market and more by choosing the right asset. In today’s competitive urban landscape, five critical factors continue to separate high-performing investments from the rest.

1. Prime Location Near Economic and Tourism Hubs 

Location remains the golden rule of property investment. Properties located near Kuala Lumpur’s economic core tend to enjoy stronger appreciation and rental demand. Areas surrounding the city centre, particularly near major landmarks such as Petronas Twin Towers, Tun Razak Exchange (TRX) and the wider Kuala Lumpur City Centre, attract both business travellers and international tourists. 

These districts attract a steady influx of business travellers, expatriates and professionals—fuelling both long-term tenancy and short-stay demand. As Kuala Lumpur expands its global footprint, surrounding growth corridors are increasingly emerging as high-potential investment zones.

2. Connectivity and Access to Public Transportation 

Accessibility plays a major role in determining tenant demand. Properties located near major highways or integrated public transport networks tend to command higher occupancy rates. Proximity to MRT and LRT lines allows residents to travel conveniently across the city without relying heavily on cars.

Developments that offer seamless connectivity to commercial districts, shopping centres, and business hubs appeal strongly to young professionals and expatriates — two key tenant groups that drive urban rental markets. In Kuala Lumpur, transit-orientated developments continue to outperform many others due to their practicality and long-term value. 

3. Design-Led Developments Command Premiums

Modern property investors are increasingly paying attention to design and lifestyle offerings. Today’s tenants are not just renting a home — they are choosing a lifestyle. Developments that feature distinctive architecture, well-planned layouts, and lifestyle facilities such as infinity pools, gyms, co-working lounges, rooftop gardens, and social spaces tend to stand out in the market. These elements enhance liveability and allow properties to command stronger rental rates. A unique architectural identity also creates a strong brand presence for a development, making it more recognisable in the competitive urban property market.

4. Riding Kuala Lumpur’s Tourism Upside

Investors should always assess the rental ecosystem surrounding a property. Areas with high tourist activity, vibrant lifestyle districts, and proximity to business centres tend to generate consistent demand for both long-term rentals and short-stay accommodation. With millions of international arrivals annually, Kuala Lumpur’s tourism ecosystem continues to underpin strong rental demand—particularly in centrally located districts. 

The rise of short-stay accommodation has further expanded yield opportunities, as travellers increasingly favour flexible, home-style stays over traditional hotels. For investors, this translates into the potential for higher returns—provided the asset is strategically located within vibrant, high-traffic areas.

5. Professional Hospitality-Style Property Management 

Many investors today prefer a passive income model where day-to-day operations are professionally managed. Hospitality-style management services can handle guest bookings, property maintenance, housekeeping coordination, and tenant servicing. This allows investors to maximise rental potential while minimising operational stress.

Professionally managed properties also tend to maintain higher service standards, which helps sustain occupancy rates and long-term value. For investors who do not have the time to manage short-stay rentals personally, this model provides a practical and efficient solution. 

Arte Star: Tapping into a New Investment Playbook

Against this backdrop, a new generation of developments is emerging—blending location strength, design differentiation and managed rental solutions.

One such project is Arte Star, a striking development positioned along the Sungai Besi growth corridor—an area increasingly recognised as an extension of Kuala Lumpur’s urban expansion. Its strategic location places it within close reach of key economic anchors such as the Tun Razak Exchange and the iconic Petronas Twin Towers, effectively situating it within a high-demand rental catchment driven by professionals, expatriates and business travellers.

What elevates Arte Star beyond a conventional residential offering is its strong emphasis on design as a value driver. The development carries a distinctive European-inspired architectural identity, characterised by bold visual elements and thematic interiors that create a memorable living environment. This design-led approach not only enhances aesthetic appeal but also strengthens the property’s positioning in both the rental and resale markets, where uniqueness and brand recognition increasingly influence tenant and buyer decisions.

Equally important is its focus on curated lifestyle experiences. Arte Star is designed to function as more than just a residence—it offers a holistic urban living environment. A comprehensive range of facilities, from wellness-orientated amenities to social and communal spaces, caters to the expectations of modern city dwellers who prioritise convenience, connectivity and quality of life. These features contribute to stronger tenant retention and support the potential for premium rental pricing.

From an investment standpoint, Arte Star aligns closely with the growing preference for income-generating, low-maintenance assets. The availability of an optional hospitality-style management programme introduces a layer of operational efficiency that is particularly attractive to investors seeking passive income. By overseeing guest services, bookings, maintenance and housekeeping coordination, such a model enables owners to participate in the short-stay rental market without the complexities of daily management.

This is especially relevant as Kuala Lumpur continues to benefit from rising tourist arrivals and a growing pool of mobile professionals, both of whom are driving demand for flexible, well-located accommodation. With its combination of strategic location, distinctive design and integrated management support, Arte Star reflects a broader shift in the market—where investment properties are no longer judged solely on price and location but on their ability to deliver a complete, lifestyle-driven and income-ready proposition.

Positioning for Long-Term Value

As Kuala Lumpur continues to attract global talent, tourists and capital, the investment landscape is evolving. Assets that combine prime location, strong design identity and professional management are increasingly defining the next wave of high-performing properties.

For investors seeking both income stability and capital upside, the message is clear: fundamentals still matter—but execution matters more.

For investment enquiries or to arrange a viewing of Arte Star, interested parties may contact Home Stories.

Email: storiesproperty@gmail.com 

HP: 017-977 8060 

www.wasap.my/60179778060/KSIArteStar1 

Genting and Cameron Highland property market shows resilience

By Sharen Kaur

Published in NST, March 24, 2026 

KUALA LUMPUR: Developers remain confident in Genting Highlands and Cameron Highlands, with a series of property launches reflecting robust confidence in the regions' tourism-driven ecosystems and rising demand for high-density, mixed-use developments that merge lifestyle living with investment potential.

Tan Ka Leong, group managing director of CBRE | WTW, noted that active launches since 2024 are predominantly strata-titled, comprising serviced apartments and commercial units tailored for tourism, short-stay rentals, and lifestyle-orientated ownership.

"Genting Highlands continues to evolve as a tourism-centric property market, with development activity closely aligned to hospitality and leisure demand. The predominance of serviced apartments and stratified commercial units reflects this ecosystem," Tan told Business Times.

Among the major developments is Breeze Hill Shoppes and Service Apartments by Tropicana Corp Bhd, launched in 2025. The project offers 1,722 serviced apartment units ranging from 430 sq ft to 976 sq ft, priced from RM400,000, alongside 90 retail shop units from 959 sq ft to 3,470 sq ft, with prices starting at RM1.1 million. The development underscores the trend of integrating lifestyle-focused retail within residential projects.

Genting Xintiandi, a 2025 joint venture between Aset Kayamas Group and Genting Malaysia Bhd, features 2,600 serviced apartments in its first phase (454–973 sq ft, from RM422,000) alongside 268 stratified shoplots (22 ft × 63 ft to 24 ft × 74 ft, from RM2.9 million), positioning it as a large-scale tourism-linked urban hub.

Meanwhile, Bayu Hill in Rimbawan by LBS Bina Group Bhd, launched in 2024, comprises 642 apartment units sized 500–1,067 sq ft, with prices starting at RM501,900, catering to buyers seeking affordable, well-located homes in emerging highland townships.

Tan said these launches highlight key market trends, including the rise of compact urban living, the integration of commercial elements into residential projects, and sustained demand for properties in growth corridors driven by connectivity and lifestyle amenities.

"Purchasers in Genting Highlands are typically lifestyle-driven buyers acquiring holiday homes, investors seeking short-term rental income, or long-term holders capitalising on the area's established tourism fundamentals. In this context, minor mobility-related costs are unlikely to materially influence purchasing decisions, particularly for stratified residential units located within established resort precincts.

Regarding the proposed one-time vehicle entry fee for Genting Highlands, Tan noted that while casual day-trippers might be slightly price-sensitive, core visitors, including overnight guests and tourists with pre-planned trips, are largely experience-driven.

"Should the proposed vehicle charge contribute towards improved road quality, enhanced safety measures and more effective traffic dispersion and congestion management, the longer-term implications may in fact be positive. Such improvements would enhance overall accessibility and visitor experience, thereby benefiting property owners, commercial operators and hospitality stakeholders alike," he said.

On the potential impact of the fee on tourism, Tan said the proposed vehicle charges are intended to support ongoing maintenance, enhance safety, and improve traffic management along the mountain access road.

"At this juncture, key implementation details, including the exact quantum of the fee, commencement timeline and potential exemptions, remain pending. As such, a definitive assessment of the overall implications would be premature.

"Based on current understanding, a modest vehicle charge is unlikely to significantly deter core visitors, particularly tourists with pre-planned trips, overnight guests and patrons of major resort attractions," he said.

However, he said that casual day-trippers may exhibit some degree of price sensitivity should the charge be set at a higher level.

"Any impact in this segment would likely relate to spontaneous or short-duration visits rather than extended stays. Given Genting Highlands' established positioning as an integrated resort destination, visitor demand tends to be experience-driven rather than purely cost-driven," he said.

Cameron Highlands Property Driven by Tourism and Local Demand

Tan noted that residential property prices in Cameron Highlands remain resilient across both landed and strata segments, supported by steady demand and evolving buyer preferences.

Landed homes are firmly positioned in the mid- to upper-range bracket, with double-storey terraced houses typically valued between RM800,000 and RM850,000. Larger, premium offerings, such as double- or 2.5-storey semi-detached homes, command higher prices, generally ranging from RM1.3 million to RM1.5 million, appealing to upgrader buyers seeking more space and exclusivity.

In the strata segment, condominiums continue to attract urban dwellers and investors, with average prices around RM500 per square foot. Flats provide the most affordable entry point into the market, with values estimated at approximately RM280 per square foot, catering mainly to first-time buyers and lower-income households.

"Overall, the pricing landscape highlights a clear segmentation in the residential market, with affordability, location, and property type continuing to shape buyer demand," he said.

Tan explained that the Cameron Highlands property market often evolves alongside its tourism-driven ecosystem. At the same time, local residents—predominantly engaged in agriculture—also contribute to demand for residential, agricultural, and industrial properties.

"Cameron Highlands is situated at an elevated terrain where the degree of slopes varies accordingly. This will make the benchmarking in terms of property values difficult, especially for agricultural properties, as steepness of the land will have an immediate impact on the property values directly," he said.

On industrial premises, Tan said that based on the available market information, the availability of the industrial premises is scarce and limited and mostly individually designed in the Cameron Highlands.

"Thus, the values will adjust accordingly to factors such as location, accessibility, type of the industrial premises, tenure, building specification and other factors deemed applicable," he said.

Meanwhile, the hospitality sector in Cameron Highlands is diverse, encompassing hotels, budget hotels, guest houses, serviced apartments, resorts, homestays, and glamping/camping sites.

High-rise residential areas are developed and retained to be operated as lodging accommodation. Based on our observations, we also noticed glamping/camping sites are gaining traction within the tourism sector among tourists, as they offer special and niche dwelling experiences rather than just offering conventional staying experiences to their clients.

"Room rates across the lodging accommodations in general fall within the range of RM250 per night to RM450 per night, depending on type of accommodation and facilities," Tan said.

Tan concluded that the overall outlook for Cameron Highlands is positive, particularly for sectors closely linked to tourism, including commercial, retail, and hospitality, as the region continues to benefit from its strong reputation as a premier tourist destination.

Sources: https://www.nst.com.my/property/2026/03/1402657/genting-and-cameron-highland-property-market-shows-resilience

Developers remain confident in Genting Highlands and Cameron Highlands, with a series of property launches reflecting robust confidence in the regions’ tourism-driven ecosystems and rising demand for high-density, mixed-use developments that merge lifestyle living with investment potential.

Genting Highlands vehicle fee seen as manageable, minimal impact on property, tourism

 By Sharen Kaur

Published in NST, March 24, 2026 

KUALA LUMPUR: A proposed one-time vehicle entry fee for Genting Highlands, set to take effect this year, is unlikely to dampen the property or tourism markets, industry experts say.

They said that the overall impact will largely depend on pricing and fair, transparent implementation.

Savills Malaysia deputy managing director Datuk Khong Weng Tuck said the key concern for most Malaysians is the cost of a round trip to the popular hilltop destination, which has traditionally been toll-free.

"We hope that the rate will be below RM10 per trip so that all Malaysians can enjoy the Genting Hills, from an earlier, toll-free position," he told Business Times. Khong noted that higher tolls could discourage casual visitors and day-trippers, who make up a significant portion of traffic, but said more committed segments, such as regular casino-goers and organised tour groups, are likely to continue visiting despite the additional cost."

Khong added that even at RM10–RM20 per trip, the fee is unlikely to materially affect tourism flows or property values in the medium term, given the already high real estate prices in the area.

However, he cautioned that daily commuters, especially residents in areas like Gohtong Jaya traveling frequently between Genting and Kuala Lumpur, could face a cumulative financial burden, potentially affecting commuting patterns and household expenses.

Visitor traffic at Genting Highlands remains strong, with 28.1 million arrivals in 2024 – a 12.9 per cent increase from the previous year – supported by a workforce of 10,847. The road connects iconic attractions at Resorts World Genting, Resorts World Awana and Genting Highlands Premium Outlets, which continue to draw strong interest, particularly from weekend visitors and bikers.

Lingkaran Cekap Sdn Bhd, the new operator of Jalan Genting Highlands, will introduce a one-time vehicle entry fee for Genting Highlands, marking the first time visitors are charged to access the private roads.

The system is targeted for rollout in the first half of 2026, although the exact start date will depend on finalising the fee structure. While earlier speculation suggested rates between RM2.50 and RM5.00, the official charge has not yet been confirmed.

The move is part of a "sustainable model" aimed at ensuring road and slope safety, infrastructure upkeep, and long-term operational resilience.

The 24km Jalan Genting Highlands is a critical infrastructure asset, requiring more than routine resurfacing. Maintenance includes slope stabilisation, drainage management, and landslide prevention – vital given the steep terrain and heavy rainfall. These responsibilities are managed by Linkaran Cekap, ensuring the road and slope remain safe and reliable.

Authorities emphasised that the upcoming fee is not a toll but a charge by Lingkaran Cekap to offset rising upkeep costs. The Genting Malaysia Group has fully funded maintenance of the private road and slopes since the 1960s. Two road-charge stations are in the midst of being constructed: the Genting Highlands Entry at Genting Sempah, about 20km from the Gombak toll, and the Gohtong Jaya Entry at the Gohtong Jaya roundabout.

The entry system will use a cashless payment system and Licence Plate Recognition (LPR) technology to automatically identify and charge vehicles at two main access points – Genting Sempah and Gohtong Jaya – for ascending traffic only. There are nine lanes at the Genting Highlands entry and eight lanes at the Gohtong Jaya entry equipped with the technology, while construction and system finalisation are ongoing.

Motorcycles will initially be exempted, though the policy for larger-capacity bikes is still under review.

Traffic Management and Strategic Opportunities

Echoing these sentiments, Samuel Tan, founder and chief executive officer of Olive Tree Property Consultants, described the toll as a traffic management tool rather than a major deterrent to tourism.

He said casual day-trippers are unlikely to be significantly affected, though visitors on tighter budgets may reduce spontaneous trips.

"The charge could incentivise a shift toward public transport such as the Awana Skyway cable car or express buses, which may lead to congestion at transit hubs during peak periods."

To address this, he suggested tiered pricing for off-peak periods, rebates for overnight stays, and clear communication on how revenue supports road safety and infrastructure.

Sources: https://www.nst.com.my/property/2026/03/1402649/genting-highlands-vehicle-fee-seen-manageable-minimal-impact-property

A proposed one-time vehicle entry fee for Genting Highlands, set to take effect this year, is unlikely to dampen the property or tourism markets, industry experts say. NSTP/HAZREEN MOHAMAD 

Highland Towers tragedy a lesson Malaysia must not ignore, says HBA

By Sharen Kaur

Published in NST, March 9, 2026 

Honorary secretary-general of the National House Buyers Association (HBA) Datuk Chang Kim Loong

KUALA LUMPUR: Many Malaysians are unknowingly purchasing homes located in high-risk residential zones, according to Datuk Chang Kim Loong, honorary secretary-general of the National House Buyers Association (HBA).

High-risk areas cover a wide range of locations that may pose safety threats to residents. These include neighbourhoods prone to flooding, hillside developments vulnerable to landslides, and areas built on limestone formations that may experience sinkholes.

Other risky locations include developments near geological fault lines, unstable soil conditions, gas pipelines, electrical substations, reservoirs, industrial facilities, or chemical plants, Chang said.

He said properties located along forest fringes also face heightened fire risks, while homes built beneath or near high-voltage transmission lines raise additional safety concerns.

"Despite these very real dangers, most buyers are not genuinely aware that they are purchasing property within such zones. Take hillside developments as an example. Homeowners are never issued a certificate confirming that a slope is safe both in its design and its final construction. Instead, they are expected to rely on the fact that approvals were granted by professionals and authorities," Chang said.

He explained that to the untrained eye, a reinforced slope may appear stable, even though structural weaknesses may only become apparent when failure occurs.

"Residential safety is not a luxury and should never be treated as optional. It is a non-negotiable right. Until transparency, enforcement, and accountability become standard practice, many Malaysians will continue living on the edge, often without realising just how close they are to falling," Chang said.

Lessons from Highland Towers tragedy

Chang said Malaysia should have learned critical lessons from the Highland Towers collapse in 1992, which claimed 48 lives following a landslide caused by heavy rainfall, poor drainage and flawed design.

"34 years ago, 48 lives were lost due to a landslide caused by heavy rainfall, poor drainage, and fundamental design failures. Yet, even decades later, there remains no genuine sense of closure or accountability. More troubling is the fact that Highland Towers was not an isolated incident," he said.

He added that similar warnings have surfaced repeatedly across the country, citing slope failures in Ampang's Taman Bukit Permai and recurrent flooding in Shah Alam's Taman Sri Muda.

"Cameron Highlands has suffered destructive mudflows driven by unchecked overdevelopment, while rapid urbanisation over limestone formations in Puchong and Rawang has resulted in sinkholes. Each of these incidents tells the same story: approvals were granted, early warnings were ignored, and ordinary residents ultimately paid the price."

Stronger hillside development rules urged to prevent future disasters

Chang said that more than a decade ago, at a national slope management seminar attended by senior government officials, engineers and planners, crucial points were raised.

"These included strengthening and streamlining guidelines for hillside developments, mandating the appointment of independent and accredited geotechnical checkers, and imposing stricter penalties on negligent developers and slope owners. Participants also agreed on the need to develop comprehensive slope inventories, formally gazette them under existing laws, and ensure slope designs are assessed holistically rather than on a project-by-project basis.

"Major earthworks and slope stabilisation works were meant to be completed before construction begins, followed by regular professional inspections of high-risk slopes. Other recommendations included maintenance manuals for engineered slopes, community monitoring groups working together with local authorities, and the establishment of a centralised geotechnical body similar to Hong Kong's system. Unfortunately, the implementation of many of these measures has remained weak."

To prevent future disasters, Chang stressed the need for stronger oversight and enforcement. This includes stricter hill-site development guidelines, mandatory involvement of independent geotechnical experts, and stronger penalties for negligent developers and slope owners.

He also called for greater transparency in environmental, social and traffic impact assessments, which are typically submitted only to local authorities and not disclosed to buyers.

Shared responsibility for housing safety

Chang said that residential safety must be treated as a collective responsibility. Developers must conduct thorough ground investigations and implement proper mitigation measures before construction begins. At the same time, local councils (PBTs) must be willing to reject unsafe development proposals outright instead of approving them with conditions that are rarely enforced.

"Government agencies should disclose risk maps transparently so that buyers can make informed decisions. At the same time, residents and prospective homeowners must be empowered with accurate information and encouraged to walk away from developments that are visually appealing but structurally dangerous. Future buyers need to recognise that some projects are nothing more than beautiful disasters waiting to happen," he said.

Limited access to impact assessments

Chang pointed out a major weakness in the current system, which is the limited accessibility of Environmental Impact Assessments (EIA), Social Impact Assessments (SIA), and Traffic Impact Assessments (TIA). These documents are usually submitted only to local authorities and are not made available to homebuyers, even though they directly affect both safety and long-term financial security.

Adding to the concern, he said that many of these assessments are commissioned by developers themselves, raising questions about independence and potential bias.

"There have been cases where traffic impact studies concluded that congestion would not occur in areas already infamous for severe gridlock. Yet when disasters strike, authorities are quick to shift blame onto buyers, arguing that consumer demand fuels risky development. This argument is deeply unfair. Buyers have a fundamental right to expect safe and sound construction, regardless of where a property is located."

Accountability still lacking

While there have been efforts to address these issues, progress has been uneven, Loong said, adding that measures such as mandatory risk disclosures, stricter enforcement, early warning systems, periodic inspections, insurance mechanisms, and climate-resilient planning are widely discussed but not consistently implemented.

However, persistent legal and regulatory failures continue to undermine real progress. These failures include poor monitoring by local authorities, weak enforcement of slope and drainage master plans, inconsistent application of the Uniform Building By-Laws and planning laws, and developments being approved without robust or truly independent impact assessments.

"Until accountability becomes real rather than theoretical, collaboration alone will never be enough," Chang said.

He said practical measures such as structured safety briefings or formal checklists during property handovers could significantly reduce risks for buyers, but such safeguards are largely absent today.

Chang added that homebuyers should reasonably expect clear information on whether a property complies with planning regulations, whether it is located within a designated risk zone, what mitigation works have been carried out, why insurers may refuse coverage, and whether there have been past incidents in the area.

"Without mandatory disclosure, buyers remain dangerously exposed. Purchasing the wrong house in the wrong location can leave homeowners financially vulnerable long before their mortgage is fully paid off," he said.

Source: https://www.nst.com.my/property/2026/03/1393332/highland-towers-tragedy-lesson-malaysia-must-not-ignore-says-hba

Experts warn that higher global oil prices to hit businesses and consumers

 By Sharen Kaur

Published in NST, March 6, 2026 

Rising global oil prices driven by escalating geopolitical tensions in the Middle East could gradually ripple through Malaysia’s broader economy, pushing up business costs and eventually feeding into consumer prices. NSTP/ASYRAF HAMZAH

KUALA LUMPUR: Rising global oil prices driven by escalating geopolitical tensions in the Middle East could gradually ripple through Malaysia's broader economy, pushing up business costs and eventually feeding into consumer prices.

Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, said industries that rely heavily on fuel and energy, such as transport, manufacturing, and services, are likely to feel the pressure first.

Logistics, utilities, and food and beverage businesses are among the sectors most vulnerable to rising costs over the next six to twelve months, he said, while rental prices could also trend higher as operating expenses increase.

Manufacturing industries that consume large amounts of energy, including iron and steel, textiles, cement, and glass, could see higher production costs if electricity and gas tariffs rise.

Service-based sectors such as hotels and leisure operators may also face margin pressure as operating expenses climb.

Fuel subsidies cushion short-term impact.

Dr Afzanizam added that Malaysia's fuel subsidy framework continues to provide short-term protection against the immediate effects of rising oil prices.

"The government oil price assumption for the 2026 budget stands at US$60 to US$65 per barrel and the prevailing Brent crude oil prices are hovering around US$82 per barrel. Should the Brent crude go into US$100 per barrel for a prolonged period, it might have an impact on the government's budget," he said.

He said that sustaining fuel subsidies under such conditions would increase the government's financial burden, even with ongoing tax adjustments and subsidy rationalisation measures aimed at creating fiscal flexibility.

Second-round effects and inflation risks

While subsidies help absorb the initial shock, Dr Afzanizam said second-round effects could eventually spread across the economy through higher logistics and transportation costs, which are key components of household spending.

Malaysia's headline inflation currently stands at about 1.6 per cent, with projections pointing to around 2.2 per cent by year-end, closer to the country's long-term inflation averages. However, sustained oil prices above US$90 per barrel for several quarters could lead to stronger cost pass-through into domestic prices.

Sunway University economics professor Dr Yeah Kim Leng noted that headline inflation this year is approaching the five-year average of 2.3 per cent and the ten-year average of 1.8–2.1 per cent, excluding deflation during the COVID-19 recession.

He explained that while Malaysia's fuel subsidies partially shield consumers and transport operators from the first-round effects of the oil price shock, the second-round effects in the coming months will gradually affect all industries, particularly heavy energy users.

"The affected industries include industrial products and consumer goods. Among the heavy users of gas and electricity in the manufacturing sector are iron and steel, textiles, cement, and glass products, while those in services include hotels and leisure industries.

"These industries will be impacted eventually when tariffs are adjusted higher due to fuel cost increases," he told Business Times.

Targeted support can mitigate inflationary pressures.

Dr Yeah added that higher fuel pump and transport fare prices are the immediate key risks but the effects can be calibrated through the fuel subsidy scheme to lessen the financial burden on households and basic service providers.

Transport costs, utilities and food and beverages are most vulnerable over the next six to 12 months. Rentals will also creep up and business costs rise as the oil price shocks cascade gradually through the economy, he said.

He said that targeted support along the supply chains is effective in securing commitment from industry players not to raise prices, thereby averting the knock-on effects on consumer prices. Delays in implementing cost-containment measures could, however, dampen inflation expectations and exacerbate price pressures.

"If profit margins are squeezed to unsustainable levels, the cost pass-through will happen more quickly. The resilience of each business will be tested, and depending on market characteristics such as number of players, competition intensity, demand conditions and consumer behaviour, such as sensitivity to price changes, the cost pass-through will vary widely.

"Based on previous episodes, headline inflation averaged 3.4 per cent during the 2011-2014 period when oil prices hit US$125 per barrel. In 2022, when oil prices reached US$120 a barrel, Malaysia's CPI inflation touched 3.3 per cent," Dr Yeah said.

Ringgit stability provides some cushion.

Dr Yeah said Malaysia's strengthening ringgit serves as a buffer against imported inflation.

"The pass-through of higher international prices to domestic producer prices and eventually to consumer prices has lagged effects that surface only if the world oil price is sustained at above US$90 a barrel for a considerable period of more than one or two quarters.

"The key variables are inventory levels, demand conditions and competitive intensity that vary across industries. Given the country's strong fundamentals, including being a net gas exporter, the risk of a sharp currency depreciation is much lower compared to energy-importing countries," he said.

Dr Afzanizam noted that the ringgit trading within the RM3.90 to RM4.00 range against the US dollar helps moderate inflationary pressures.

"A stronger ringgit reduces the cost of imported goods, while a weaker one has the opposite effect," he said.

While Malaysia may benefit from higher crude prices as an exporter, Dr Yeah warned that prolonged volatility in the ringgit and global markets could offset these gains.

"The gains as an exporter nation, while helping to shore up Malaysia's economic stability and investment attractiveness, are likely to be negated by a global economic slowdown and financial market turbulence should the war mirror that of the Russia-Ukraine conflict," he said.

Samuel Tan, founder and chief executive officer of Olive Tree Property Consultants, echoed their concerns, noting that prolonged currency and market volatility could increase the cost of imported intermediate goods and escalate the national fuel subsidy burden.

He said if Brent crude remains sustained above US$90, the rising fiscal cost of domestic subsidies can outpace the incremental revenue gains, potentially straining Malaysia's fiscal flexibility.

"Though a stronger ringgit provides a critical buffer, price stability remains highly vulnerable to such external shocks. If the currency depreciates sharply or Brent exceeds US$90, the pressures on escalated inflation will be higher. This leads to a higher cost of living across the board," Tan said.

On household spending, Tan advised that non-essential expenses would be most affected over the next six to twelve months.

"Discretionary spending on non-essential expenses will be the most affected. Examples are entertainment, travel and expensive dining out. Middle-income households will likely focus on "wants" rather than "needs". Covering necessities such as housing, food and utilities will be the priorities," he said.

Overall, both economists and Tan said market confidence remains intact, particularly among foreign investors, supported by consistent economic policies and stable governance.

However, they cautioned that the situation remains fluid. A combination of ringgit depreciation and sustained oil prices above US$100 per barrel could sharply raise import costs, complicating inflation management.