Overseas buyers investing in Malaysia, Malaysian buyers investing overseas

property in malaysia

Despite widespread woes concerning the global economic crisis, property investments within Malaysia and those made by Malaysians overseas are expected to increase significantly this year according to a recent report released by the Star Online.

Apparently, Malaysian buyers are increasingly being drawn to investment opportunities in Singapore due to the recently introduced stamp duty of 10 percent for foreigners buying properties. Furthermore, due to Malayan Banking Bhd introducing new housing loans for those buying into the Australian market, property investments by Malaysians in Melbourne are expected to increase by somewhere between 15 percent and 18 percent this year. Managing director of Property Talk International Sdn Bhd, Steven Cheah, explained that in comparison with the last three years, there had been a significant increase in foreign buyers showing an interest in Malaysian properties.

“The other reason is that Kuala Lumpur still remain as one of the few South East Asian cities with attractive property prices. Compared to Jakarta, the price for a prime residential in Kuala Lumpur is about 15 percent lower. The buyers are from Indonesia and China and they show preference for Iskandar, Johor Baru and Kuala Lumpur. Indonesians prefer Iskandar because it is close to Singapore,” he explained.

According to Cheah, Indonesian and Chinese buyers tend to be interested in properties priced between MYR600,000 and MYR1.5 million (US$193,392 483,559) in Kuala Lumpur and Iskandar, whereas homes above MYR1 million (US$322,373) are the most popular in Penang. Indonesians are also displaying more interest in Malaysian property since Air Asia added direct flights to Penang from Jakarta to its routes. Property Talk is expecting to sell around MYR55 million (US$17,727,655) worth of properties in Penang, Johor and Kuala Lumpur, an increase of MYR35 million (US$11,281,235).

“Over the past three months, we have sold over RM25mil worth of properties, comprising 35 residential homes located in Kuala Lumpur and Iskandar, Johor Baru. We expect to sell another RM30mil worth of properties, comprising 30 to 40 homes, from Iskandar, Kuala Lumpur, and Penang via three more property exhibitions in Jakarta jointly organised by Malaysia Property Incand private developers before the year ends,” he said.

Cheah went on to explain that Melbourne is now a top investment choice for Malaysian buyers.

“This is because many Malaysians have relatives who have migrated to Melbourne, where you can find a variety of Malaysian food restaurants. According to the latest research from Australian Property Monitors (APM), over the last five years, Melbourne has been the standout performer among the major capital cities for house price growth, with prices increasing almost 30% in just 15 months,” he said.

Targeting the Chinese market, the chief operating officer of Henry Butcher Marketing Sdn Bhd, Tang Chee Meng, revealed that his company has recently set up a property show gallery in Beijing.

“The gallery, set up two to three months ago, showcases residential properties from Klang Valley, Malacca, and Penang. Investors from China are big time property purchasers in Singapore. With the 10% stamp duty introduced, Malaysian developers are now trying to attract them over. We still need to do a lot of education work in China to promote Malaysia as a property destination, as the awareness is still lacking,” he said.

He also said that there were many Chinese investors showing interest in buying vacant land in Malaysia in order to develop residential projects.

“We hope they will undertake development in Malaysia and promote the properties in China. This will help to increase more awareness for Malaysian properties in China,” said Tang. He added that after the global economic crisis erupting, interest in local properties from foreign buyers dropped significantly.

”We see a return of foreign interest, but the volume and value of property transactions involving foreigners still have not not recovered to anywhere near its peak. We believe the pace of investment from overseas will remain flat against last year. Besides tapping into traditional sources like Singapore, Hong Kong and Indonesia, Malaysian developers are moving into markets such as South Korea and China. China is a vast market and if Malaysian developers are able to educate the investors on the attraction of Malaysian real estate, we may see a surge in foreign interest,” he said.

The company’s director for international marketing, Jazmine Goh, said that the global economic crisis had in fact been partly beneficial for Malaysian investors, since it has created favourable buying conditions and increased opportunities to buy real estate overseas.

“The economic slowdown in Britain has caused property prices to plunge and coupled with the drop in the value of the pound sterling against the ringgit, properties in the United Kingdom have become more affordable and within reach of middle income Malaysians. The mortgage defaults in the United States have also resulted in a lot of opportunities to pick up properties foreclosed by the banks at a fraction of the original price. Of course, the fear of the prolonged debt woes in Europe has at the same time resulted in a more cautious attitude being adopted by investors,” she said.