Foreigners Are Still Attracted To Malaysian Real Estate
Surveys by iProperty.com and REA Group point to an exciting nugget of information – Malaysia is rising in ranks on the foreign property investment hot list. -REENA KAUR BHATT-
iProperty.com Group is part of the Australian Stock Exchange (ASX)-listed REA Group; with market capital of $AUD8 billion. REA is also the leading global leader in online advertising serving the property industry. At a recent conference hosted by REHDA Institute, Haresh Khoobchandani, CEO of iProperty.com Malaysia & Singapore shared survey data from REA Group showcasing Australian consumers’ international real estate demand trends, i.e what and where are Australians looking to purchase properties overseas?
Homes in Malaysia: Top 10 list
Malaysia appeared as one of the countries on the top 10 list of Australian investors’ choice for real estate investment. Malaysia’s popularity among overseas buyers is backed by iProperty.com’s very own Asia Property Market Sentiment Survey (H2 2016). Carried out across Malaysia, Indonesia, Hong Kong and Singapore, the survey provides an insight into the region’s consumers’ intentions, preferences and motivations for acquiring a property. One of the survey’s key finding - interest in purchasing properties overseas, including in Malaysia, remained high, with many respondents citing migration, favourable currency rates and economic slowdown as key factors driving this trend.
Who, What & Where?
Figures from both REA Group and the Asian Sentiment Survey showed tremendous promise; foreign investors demand trends are highlighted below:
The favourite hotspots are:
The World is Your Oyster with iProperty.com
It was through these surveys REA ascertained that many consumers out there have a huge intention to buy property overseas and this huge demand has led to REA launching it's very own unique global property network last year.
The new listings experience allows consumers to search for international properties from 72 countries across Europe, the Americas and the Asia-Pacific region. With 4.5 million listings and growing, this feature can be found on the iProperty Group’s core sites in Malaysia, Hong Kong, Indonesia and Singapore.
In Malaysia, Haresh shared that the top 10 international visitors to the iProperty.com site are from Singapore, followed by the US, Australia, the UK, Hong Kong, Indonesia, India, Japan, China and the UAE.
Haresh says that there is a range of factors driving interest in the Malaysian property market. The country’s appeal includes:
- Value for Money Investment
The main reason foreigners are interested in investing in Malaysian properties more than any other country is that they know they are getting the biggest bang out of their buck.
A study carried out by REA proves this - RM1 million buys you 1,190 sq ft of space in Malaysia (KLCC) as compared to 140 sq ft in Singapore (District 09) and 150 sq ft in Hong Kong (Wan Chai).
- Good Accessibility & Growing Transportation Infrastructure
Its strategic location gives Malaysia an added edge, one can access 60% of the world’s population from Malaysia within a 5-hour radius; comparatively this percentage for New York is only 5%.
Within Malaysia, transportation infrastructure is continuously being improved; recent and upcoming projects include the upgrading of the LRT Lines 1,2 and 3, Mass Rapid Transit (MRT), Electric Train Service (ETS) from South (Johor) all the way up north (Padang Besar), Singapore – KL High-Speed Rail (HSR) and the East Coast Rail Line project which will connect Klang Valley to the eastern part of the peninsula.
- Easy & Foreigner Friendly Policies
Sweetening the pot for foreign retirees is the Malaysia My Second Home Programme (MM2H) which allows foreigners to stay in Malaysia on a social visit pass for 10 years, and it is renewable upon fulfilment of the renewable requirement when it expires.
This programme is a hit and a wave of investors from China is beginning to emerge as shown by the number of MM2H foreign purchasers from 2002 to June 2016:
As pointed out by Haresh, the MM2H potential is tremendous; more should be done to promote foreign property ownership in Malaysia. Many countries provide a ready catchment of prospective buyers; for example, Pakistan has a population of 1.2 billion.
Besides that, any MM2H transaction is exempted from the approval of the Economic Planning Unit (EPU) and foreign home buyers get to enjoy special prices in most states.
- Green Light To Purchase Sub-sale & New Developments
Foreign ownership of Malaysian property is pretty liberal, foreigners can even own 100% of the property as long as minimum requirements are met. Some restrictions do apply:
-Properties valued < RM1 mil; though the minimum threshold differs in certain states (Selangor:<RM2 mil; Penang Island: <RM 3 mil; Perlis: <RM500,000)
-Low and medium cost residential units as defined by the state authority.
-Properties standing on Malay Reserved land.
-Properties allocated to Bumiputera interest in any property development project as determined by the state authority.
- It is Ranked 6th in the Annual Global Retirement Index by International Living
It is no wonder that Malaysian real estate is much sought after - Foreign investors love its tropical climate, tasty local fare and its multi-racial environment. The latter especially is a boon for purchasers from other Asian countries; many find it easy to assimilate into the local culture; the familiarity of dialects and food coupled with the warmth of Malaysians is a win-win for them.
Malaysia, A Country For Everyone
There is no denying that Malaysia presents a great and unique opportunity to attract foreign investors – Haresh feels that developers should make their move to capitalise on this trend. As such, the ability to engage with these potential buyers is critical. To attract buyers, we will first have to understand and identify your overseas buyer, localise the message and finally provide detailed and comprehensive information which expedites the decision-making process. With the advancement of technology, the smartest and most effective way to execute these 3 steps is through an online platform, shares Haresh.
*With the largest database of the most up-to-date listing, the iProperty.com portal helps tens of thousands of expatriates and foreigners make informed decisions when finding their dream homes or investment properties.
Visit https://www.iproperty.com.my/international/ today to find out more.