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Email this to a friendMalaysia's Real Estate Beckons
“Location, Location, Location” is without doubt the real estate investors’ conventional wisdom for investing in a property anywhere in the world. Malaysia today has been identified as one of the preferred destinations for real estate investment. The country is surrounded by 5 of the top 10 global economies in the 1st half of the 21st century ie. China, India, Japan, Indonesia and Middle East with long term strong global growth prospects. The Asian development Bank in its April 2010 Outlook expects Asia to grow 7.5% this year and 7.3% in 2011.
Malaysia’s GDP growth registered 4.5% for the last quarter 2009 after 3 quarters of consecutive contractions. The official growth forecast for 2010 is about 5%. Some analysts are even more optimistic with projections of between 7-8% on the back of rising exports fuelled by higher commodity prices and domestic demand. The March 30th announcement of the new economic model (NEM) has brought in fresh hopes and aspirations to take Malaysia to a high-income nation with per capital income of USD15,000 from the current USD7,000 by 2020. In the recent World Competitiveness Yearbook (WCY) by the Swiss-based Institute for Management Development (IMD), Malaysia has been ranked one of the top 10 most competitive nations among 58 economies.
With global markets emerging from the recession and consumer confidence returning it is observed by many property analysts that sentiments towards property as an investment has improved considerably compared to 2009.
In Kuala Lumpur and Penang, developers have been observed to be actively on the acquisition trail of more development land in the wake of an economic recovery with positive growth in the 1Q of this year as a major impetus. New launches over the last 6 months have been reported to be successful. For example, in the city of Kuala Lumpur, projects such as the St. Mary’s serviced apartments, Sky Residences and Verticas Residensi saw good responses from both the local and foreign market. Similarly in Mont’Kiara, the One Kiara freehold project was also very well received. In Penang, IJM’s well-conceptualized Pearl Regency and the Light Collections residential developments have received remarkable market support whilst the Quayside at Tanjong Sri Pinang have also similarly reported brisk sales.
Real estate agents have reported increases in enquiries from well-heeled investors for investments in the upscale residential estates such as Kenny Hills, Damansara Heights and Pantai Hills in the Bangsar area in the Klang Valley. Penang’s luxurious residential enclave between the Jesselton and Gurney Drive precincts have proven to be a first choice location amongst astute investors. Although most investors are cautiously optimistic of the market, the residential sector has indeed picked up significantly form the depths of the recession in the first half of 2009. While, a lot of transactions are locally-driven, some lesser informed foreign investors are observed to be sitting on the sidelines, waiting to be cajoled that Malaysia has much to offer. A resurgence of foreign demand similar to the 2006 to 2007 period is yet to be seen. In this respect, an effective national strategy to promote Malaysia as the preferred real estate destination is still the sine-qua-non. Malaysia has many obvious advantages over its immediate neighbours in the competition for foreign real estate investment. Thailand’s political situation is worrying while Singapore was rated the world’s 10th most expensive cities for both locals and expatriates. Malaysia is anticipated to emerge as the “poster boy” in the competition for foreign real estate investment given the right business strategy.
Whilst asking prices of condominiums in the KLCC dropped by as much as 20-30% during the height of the recession, most industry analysts generally agree that transacted prices this year may be firmer in line with a positive economy. Prices of real estate in Penang as a whole held well in 2009. There were no “fire sales”.
According to ING’s quarterly ING Investment Dashboard Survey, Malaysian investors’ confidence rose to 146 in Q1 2010 from 139 in Q4 2009. The overall market sentiment is more positive since both foreign and Malaysian investors’ confidence is back, thus reaffirming the country’s envious ‘optimistic” position.
With ample liquidity among investors and the negative real returns from bank deposits, property have proven to be clearly a preferred choice for investments. Investors who have benefited from the recovery of the stock markets are also now observed to partake more actively in property investments.
A strong correlation between property transactions and gross domestic product (GDP) growth has to a large extent resulted in the channeling of more money and focus to real estate as an asset class of choice to hedge against inflation. A well selected sound property portfolio generally has the capacity for being profitable, be reasonably secured, have a ready sub-sale market, stable yield and produce positive cash flow. However, the general concern is that the economy is now confronted with rising inflationary pressures and the sustainability of the stock markets in the second half of 2010.
Compared to the region, Malaysia generally remains a very competitive location as it is one of the most “value-for-money” real estate destinations. This makes Malaysia an affordable and attractive choice compared to other countries which are too expensive or lack the necessary infrastructure.
Source: Global Property Guide (http://www.globalpropertyguide.com/Asia/)
In Penang, the recent conferment of the UNESCO World Heritage status on George Town has also attracted many investors to consider the Island State as a location of choice.
The allure of Penang’s real estate offerings has resulted in attracting more foreign investors this year. Most of them are working expatriates, Malaysia My Second Home participants, overseas students and retirees. According to FIC data, the number of properties purchased by foreigners in Malaysia formed only 2.5% of total number of properties transacted (RM2.3 billion) nationwide in 2006, making up only 12.3% of total value of transactions.
Most people consider Malaysia to have an exceptional long term growth potential for real estate. Maria Hann of Retirement Today (www.retirement-today.co.uk), ….. could not have put it in a better way ….. “Penang, Malaysia is perfect for property investment”.
Malaysia’s GDP growth registered 4.5% for the last quarter 2009 after 3 quarters of consecutive contractions. The official growth forecast for 2010 is about 5%. Some analysts are even more optimistic with projections of between 7-8% on the back of rising exports fuelled by higher commodity prices and domestic demand. The March 30th announcement of the new economic model (NEM) has brought in fresh hopes and aspirations to take Malaysia to a high-income nation with per capital income of USD15,000 from the current USD7,000 by 2020. In the recent World Competitiveness Yearbook (WCY) by the Swiss-based Institute for Management Development (IMD), Malaysia has been ranked one of the top 10 most competitive nations among 58 economies.
With global markets emerging from the recession and consumer confidence returning it is observed by many property analysts that sentiments towards property as an investment has improved considerably compared to 2009.
In Kuala Lumpur and Penang, developers have been observed to be actively on the acquisition trail of more development land in the wake of an economic recovery with positive growth in the 1Q of this year as a major impetus. New launches over the last 6 months have been reported to be successful. For example, in the city of Kuala Lumpur, projects such as the St. Mary’s serviced apartments, Sky Residences and Verticas Residensi saw good responses from both the local and foreign market. Similarly in Mont’Kiara, the One Kiara freehold project was also very well received. In Penang, IJM’s well-conceptualized Pearl Regency and the Light Collections residential developments have received remarkable market support whilst the Quayside at Tanjong Sri Pinang have also similarly reported brisk sales.
Real estate agents have reported increases in enquiries from well-heeled investors for investments in the upscale residential estates such as Kenny Hills, Damansara Heights and Pantai Hills in the Bangsar area in the Klang Valley. Penang’s luxurious residential enclave between the Jesselton and Gurney Drive precincts have proven to be a first choice location amongst astute investors. Although most investors are cautiously optimistic of the market, the residential sector has indeed picked up significantly form the depths of the recession in the first half of 2009. While, a lot of transactions are locally-driven, some lesser informed foreign investors are observed to be sitting on the sidelines, waiting to be cajoled that Malaysia has much to offer. A resurgence of foreign demand similar to the 2006 to 2007 period is yet to be seen. In this respect, an effective national strategy to promote Malaysia as the preferred real estate destination is still the sine-qua-non. Malaysia has many obvious advantages over its immediate neighbours in the competition for foreign real estate investment. Thailand’s political situation is worrying while Singapore was rated the world’s 10th most expensive cities for both locals and expatriates. Malaysia is anticipated to emerge as the “poster boy” in the competition for foreign real estate investment given the right business strategy.
Whilst asking prices of condominiums in the KLCC dropped by as much as 20-30% during the height of the recession, most industry analysts generally agree that transacted prices this year may be firmer in line with a positive economy. Prices of real estate in Penang as a whole held well in 2009. There were no “fire sales”.
According to ING’s quarterly ING Investment Dashboard Survey, Malaysian investors’ confidence rose to 146 in Q1 2010 from 139 in Q4 2009. The overall market sentiment is more positive since both foreign and Malaysian investors’ confidence is back, thus reaffirming the country’s envious ‘optimistic” position.
With ample liquidity among investors and the negative real returns from bank deposits, property have proven to be clearly a preferred choice for investments. Investors who have benefited from the recovery of the stock markets are also now observed to partake more actively in property investments.
A strong correlation between property transactions and gross domestic product (GDP) growth has to a large extent resulted in the channeling of more money and focus to real estate as an asset class of choice to hedge against inflation. A well selected sound property portfolio generally has the capacity for being profitable, be reasonably secured, have a ready sub-sale market, stable yield and produce positive cash flow. However, the general concern is that the economy is now confronted with rising inflationary pressures and the sustainability of the stock markets in the second half of 2010.
Compared to the region, Malaysia generally remains a very competitive location as it is one of the most “value-for-money” real estate destinations. This makes Malaysia an affordable and attractive choice compared to other countries which are too expensive or lack the necessary infrastructure.
Source: Global Property Guide (http://www.globalpropertyguide.com/Asia/)
In Penang, the recent conferment of the UNESCO World Heritage status on George Town has also attracted many investors to consider the Island State as a location of choice.
The allure of Penang’s real estate offerings has resulted in attracting more foreign investors this year. Most of them are working expatriates, Malaysia My Second Home participants, overseas students and retirees. According to FIC data, the number of properties purchased by foreigners in Malaysia formed only 2.5% of total number of properties transacted (RM2.3 billion) nationwide in 2006, making up only 12.3% of total value of transactions.
Most people consider Malaysia to have an exceptional long term growth potential for real estate. Maria Hann of Retirement Today (www.retirement-today.co.uk), ….. could not have put it in a better way ….. “Penang, Malaysia is perfect for property investment”.
By Dr. Jason Teoh
Henry Butcher Malaysia Penang