A Guide To Property Investment Malaysia

From its white sandy beaches with crystal blue waters to its incredibly metropolitan and sophisticated cities, Malaysia is very different in many way from other popular property investment locations. The country offers all the attractions of major beach holiday destinations combined with an affluent city landscape and manages to blend in a distinct Asian styling.

With its booming tourism industry, strong real estate market and aggressive government programmes to attract investors, retirees, expats and holidaymakers, Malaysia is a country of interest to many foreign investors. Malaysia’s property market today has key influences driving investor interest and commitment to Malaysian real estate investment.

1. Malaysian Government’s Long-standing Stability Bolsters Property Investor Confidence in the Region

Technically a constitutional monarchy, Malaysia has enjoyed sovereignty under an elected government since the 1950s. Known officially as the Federation of Malaysia, the country includes 13 states and is overseen by a Prime Minister, a House of Representatives and a Senate. Although it has experienced its share of turmoil in the past, the Malaysian government has held sway for decades, opening the doors for a strong tourism trade and a welcoming investment environment. The government’s long-standing stability gives property investors maximum confidence in this beautiful South-east Asian country.

2. The Nation’s Track Record for Embracing Foreign Investors and International Visitors Makes Investing in Malaysian Real Estate Feel Natural

The Malaysian government has rolled out the welcome mat for foreign investors. The country has undergone numerous reforms to bring its real estate market into a boom phase and is working to continue this trend. At the 2007 National Property and Housing Summit a representative from the prime minister’s office reiterated the official position on development. Despite a relaxation in foreign exchange controls, removal of restrictions on the number of properties foreigners can own and the creation of the Malaysia My Second Home programme, the spokesman Datuk Sri Effendi Norwawi said even more needs to be done to improve local housing and bolster marketing specifically to the foreign investment market.

The level of dedication the government has shown toward attracting and retaining foreign investment into the property industry in particular is quite extraordinary. This of course makes investors not only feel welcome, but also confident when buying Malaysian property.

3. Low Cost of Living Fuels Tourism, Second-Home Buying and Property Investor Profits in Malaysia

The cost of living in Malaysia is one of the most affordable in all of Asia. This helps bring holidaymakers into the country and also makes it attractive to expatriates and second-home buyers. This is very good for investors who plan on earning an income from buy-to-let properties and especially good news for those who are looking to buy and hold for a while for resale at higher prices down the road. The property market is presently described as being in a boom state. All of these factors combine to make Malaysian property more than just a little attractive to foreign investors.

4. Favourable Exchange Gives Strong Buying Power for European Based Property Investors in Malaysia

The low cost of living and the favourable exchange rate between the UK, Europe and Malaysia makes Malaysia highly attractive to buyers, holidaymakers and expatriates at the moment. With a single pound exchanging for nearly 7 ringgit for example, Britons’ money spends incredibly well here when invested into property in particular. And many expatriates, retirees and longer-term holidaymakers are even able to hire domestic help off the most reasonable of pensions or incomes meaning the nation is of interest to a broad base of individual. The favourable exchange rate bodes extremely well for investors looking to buy property at reasonable prices today to hold for long term capital growth, and also for those who want to draw holidaymakers to their rental Malaysian real estate.

5. A Growing Travel and Tourism Industry Gives Investors in Malaysia a Great Outlet for Returns

With some of South-east Asia’s most beautiful sites, its incredible weather and pristine beaches, Malaysia has a very strong tourism industry. The World Travel & Tourism Council estimates that the 2007 value of tourism for the country will fall in around USD 33.6 billion. Tourism here is on the rise, with an anticipated growth of 6.6% per annum between 2008 and 2017 – which is way above the international norm. From climbing Mt Kinabalu to touring the sights of Kuala Lumpur, there isn’t a shortage of wonders to behold within Malaysia. Its unique wildlife and pristine beaches also pack in holidaymakers in ever-growing numbers. This is exceptionally good news for property investors who want to target their properties toward the holiday-making market. With demand anticipated to rise annually, the prospects for buy to let profitability are bright.

6. The Climate and Geography Make Malaysia Stand Out at a Time When Investors Need a USP

Considering there is a general cooling of property markets around the world, the fact that Malaysia stands out in terms of its appeal, its lower property prices, its increasing tourism and the massive government commitment to the ongoing success of the nation – this all acts as a unique selling point for a property investor.

Malaysia is comprised of two quite distinct geographical areas, eleven of its states are found on the peninsula shared with Thailand to the north and Singapore and Indonesia to the south. The territory of Labuan and the states of Sabah and Sarawak are located 1,000 kms away in East Malaysia near Borneo, Indonesia and Brunei. With much of Malaysia surrounded by the South China Sea, visitors here will find a weather pattern that is best described as equatorial. The tropical and quite humid climate boasts temperatures around 30C during most times of the year. Holidaymakers will find much cooler temperatures in the more mountainous regions. The beautiful weather, incredible mountains and seaside views all combine to make Malaysia a favourite for holidaymakers, retirees and expats. The result is great investment potential for foreign buyers who utilize a number of different strategies within their property portfolio.

7. Buying Property in Malaysia is Hassle Free Making Investors More Comfortable

The property buying process in Malaysia is straightforward and investors will find that recent programmes have streamlined the process even further. Getting a mortgage in Malaysia is also possible for foreign investors through local banks and several international banking corporations as well, with the likes of big name players CitiBank having branches in the nation – all this adds to the ease and familiarity of everything related to the property buying process in Malaysia.

The actual tax exposure in Malaysia is quite low for investors who hang on to their property for a few years as well, capital gains is about 30% during the first few years after purchase, but drops sharply to 5% thereafter so this holding of property needs to be factored into an investor’s plans.

8. Booming Real Estate Market Makes Malaysia Very Attractive to Investors

Although 2007′s real estate market movements aren’t quite as ‘booming’ as experts predicted, the market is solid. Property investors in Malaysia are particularly pleased with a recent announcement that a Middle Eastern consortium intends to invest more than USD 1.4 billion in energy improvements, Islamic banking and the Malaysian property sector. Also, as the government works to raise awareness of the Malaysian property market and its distinct attractions, interest in the nation is massive. Property prices in Malaysia, despite all this, remain very affordable especially when compared with other hot markets around the world. New well located in demand 2-bedroom spa flats for example, have an entry price well below GBP 150,000. All of these things combine to make the Malaysian market incredibly attractive right now. Many expect the presently low prices for entry will not remain so low for so long and this gives an investor a straight capital growth path to follow.

9. National Economic Stability Gives Investors in Property in Malaysia Long-term Peace of Mind

With less than 30 million citizens living within it borders, the Malaysian economy is incredibly stable. With a GDP of USD 130.8 billion in 2005 and annual growth nearing 6%, the country’s economic status is more than holding its own despite recent worldwide downturns. The Malaysian economy is fuelled by the electronics, petroleum, timber and tourism industries and the stability of the nation’s economy combined with its low unemployment rate makes this a very attractive market for buyers that desire growth environments for their investment strategies.

10. Incredibly Welcoming People Make Buying Property in Malaysia and Living and Visiting the Nation Attractive

As evidenced by the government’s recent reform programmes to welcome foreign buyers and international holidaymakers, the Malaysian climate is very friendly for foreigners. The Malaysian people themselves are legendary for their warm nature and their desire to make expats, holidaymakers and investors at home in their country as well. There is such a positive vibe in and around Malaysia that it is no wonder it is attracting and retaining such strong levels of FDI.

Malaysia is a jewel in the South China Sea that is opening its doors wide for foreign investors and holidaymakers. With a promising property market and a tourism industry that is constantly growing, investors here are secure in the knowledge the country is going places.

• Tweet