Malaysia

Overview

The Malaysian property market offers a good mid range investment opportunity to international investors seeking reasonably priced real estate with sustainable growth potential in both the residential and tourism sectors.

The stability of the property market in Malaysia is based upon the stability of the country’s economy which is currently expanding at a sustainable rate and benefiting from closer export ties with China as well as strong levels of foreign direct investment from the US, China and Japan.

Furthermore the attraction and appeal of the country means that it has a robust tourism sector that has spawned a secondary holiday home market which further boosts the long term strength of the property market and broadens the investment opportunities available to an investor.

International real estate investor interest in Malaysia is roughly divided into those who target the professional, executive rental market particularly in Kuala Lumpur and those who seek to profit from the tourism market either through residential short term lets, commercial accommodation units or through the development of properties for sale to second home and holiday home hunters.

The large expatriate population employed in Kuala Lumpur has pushed up demand for serviced apartments, well located property and real estate in general to rent which means that rental rates chargeable in Kuala Lumpur are on a par with any major city worldwide and new off plan properties are being sold to international property developers with impressive guaranteed rental yields of between six and ten percent.

Real estate investors in Malaysia looking outside Kuala Lumpur for property investment opportunities are mainly attracted to the North Western island resorts and the tourism sector where strong short term rental rates are chargeable and annual returns from letting to the tourism market are impressive. There’s also potential to target second homers seeking an exotic overseas home in the sun.

The benefits of Malaysia as a destination for a property investor are manifold and stem primarily from the strength of the country’s economy. GDP growth was in excess of 7% in 2004, inflation in Malaysia is low, unemployment is low, exports and reserves are strong and strengthening and Malaysia has very supportive governmental policies for the attraction of foreign investment which include tax incentives and pro-business policies. Therefore an international real estate investor looking for a well priced, strong economy to target for sustainable growth and yields over the medium to long term should consider Malaysia.