Should You Invest?
Malaysia has a prime up-and-coming property market generating a
lot of foreign interest. The most popular regions for international
investors tend to be major cities such as Kuala Lumpur which have
growing financial, cultural and tourist
industries.
- The Malaysian government recently scrapped capital gains tax on
property and relaxed its laws on foreign ownership.
- Demand has also been promoted by a flourishing tourist
industry. Over 19.1 million tourists visited Malaysia in 2007,
nearly 20% more than the figures recorded for 2006.
- The proposed introduction of budget flights by AirAsiaX from
London to KL is also likely to enhance tourist numbers to all the
key coastal resorts.
- Annual property growth is between15% to 30%.
- Malaysia has a low cost of living compared to other
countries.
- The country currently has a high rental demand due to a growing
tourist industry.
Rental Yields
Rental yields for property in major cities in Malaysia are
slightly higher than those in more rural, smaller areas. Rental
yields in Kuala Lumpur for luxury condominiums, upmarket detached
houses and bungalows are currently between 7.4% and 8.7%. In Penang
rental yields for beachfront property are now 7% for 100 sq m
properties and tend to be closer to 4.5% for larger properties.
Price History
During the 1990s Malaysia was one of the leading Asian Economic
Tigers, with a booming economy and a real estate market to match.
Prices in KL rose rapidly, and new commercial and residential real
estate projects sprang up across the city.
In 1997, the Malaysian economy, along with the rest of South
East Asia crashed due to the Asian Economic Crisis which ignited as
speculators caused regional currencies to fall though the floor.
Every aspect of the Malay economy was affected, including the real
estate market.
In the years since 1997 Malaysia has recovered, faring better
than many of its neighbours. By the early noughties demand for real
estate in KL had begun to catch up with supply and prices have been
rising steadily ever since. By 2004 house prices in Kuala Lumpur
were increasing at 6.3% to be capped in 2005 with increases of
7.2%. These remarkable increases continued in 2006 with
prices up 6.9% (Global Property Guide).
Despite the increases, Malaysian property has a proven track
record at higher prices. Today the economy is more stable and more
open, meaning that higher prices are likely to be far more
sustainable than in the 1990s. All this suggests that property in
Malaysia offers international investors strong investment
opportunities.
Top