Lim said the new rule can be seen as a positive step to boost the real estate sector, but the requirement to hold these properties for at least 10 years is proving to be a “significant deterrent and counterproductive”.

“This rigidity makes the scheme less appealing compared to more flexible options available in neighbouring countries like Thailand and Indonesia,” he said in a statement.

He said agencies processing MM2H applications have reported a dramatic decline in interest, with a 90% drop in prospective applicants.

Lim also quoted a Singapore Straits Times report which said that foreign retirees have grown cold to the MM2H scheme following the revamped rules.

The report cited economists as saying that even a new category of visas for residents in special economic or financial zones, aimed at upcoming developments in Johor, is unlikely to lift demand for the scheme.

Under the new rules, MM2H runs under a three-tier system – Platinum, Gold, and Silver – each with different financial requirements and benefits. For all tiers, prospective applicants must purchase property, subject to the prescribed minimum purchase value, and hold them for a minimum of 10 years.

MM2H Consultants Association previously raised concerns that the mandatory property purchase and the length it has to be held was “excessive” for those under the Silver tier, given that it is only a five-year visa.

Lim stressed that the MM2H scheme needs to strike a balance between attracting high-net-worth individuals and providing flexibility to make Malaysia a desirable retirement destination.

“Although the new scheme’s focus on high-net-worth individuals represents a policy shift, its stringent requirements have significantly narrowed the applicant pool.

“Reassessing the 10-year holding requirement could be a crucial step in revitalising interest and ensuring the scheme’s success,” he said.