Malaysia - The Property Investors' Darling
Wednesday, July 18, 2007
The British love-affair with Malaysia runs deep. As a former British colony, Malaysia strikes a familiar chord with many a British visitor, while its sumptuous Asian charms seduce more international tourists each year – forecasts this year predict a record number of 20 million visitors to Malaysia, five million up from last year’s figures.
As many a property investor is aware, tourists mean a potentially strong market and, unlike some of its neighbours, Malaysia is now catching the eye of investors by actively touting its tourist industry in a drive to further boost its steadily growing economy. This year, marking 50 years of independence, Visit Malaysia Year is set to increase international awareness of the exotic delights and experiences just begging to be discovered here.
Malaysia has plenty to offer: a superb climate, stunning coastal and rural scenery, a multitude of recreational activities, buzzing city life in Kuala Lumpur and charming, polite, multi-cultural people. On an investment level, excellent international airport links and modern transport within the country allow easy passage to its favourite resorts and cities. With banking and legal systems akin to those in the UK, more cautious property purchasers are undeniably reassured by a purchase in Malaysia. Today the government’s economic policies, formalized in its Ninth Plan and destined for fruition within three more years, are enticing property purchasers to snap up real estate at today’s very tempting prices in the run up to inevitable price increases by 2010.
Shrewd property investors are fast recognizing the potential Malaysia offers for investment both in the city as well as in Malaysia’s emerging coastal tourist resorts. With growth on residential city property over the past five years rocketing to between 15 and 30% and rental yields at a very respectable 7.4 to 8.7%, it is easy to see why Malaysia is now becoming the darling of many overseas property investors, all eager to make some of the most worthwhile investment returns available in Asia today.
Fully equipped to deal with the new wave of investors, Malaysia treats foreign buyers pretty much on an equal footing to the locals, while all are protected by the same real estate laws. However, certain restrictions do apply: foreign ownership is currently limited to a minimum value of MYR 250,000 (approximately GBP36,000, EUR54,000, or USD72,000) with various government stipulations regarding maximum ownership of properties, subject to what you wish to purchase. Also once you have bought your property, under Malaysian law you must hold onto it for at least 3 years. This aside, the buying process couldn’t be more straightforward, while Malaysian banks are more than willing to finance up to 70% for property purchase. Do be aware that the application process could take up to three months - rather longer than in other countries - so make sure you get your paperwork in early to avoid unnecessary delays.
With the Malaysian Ringgit so cheap against other currencies such as the US dollar, the Euro or the British pound, the good news is that seekers of property for investment in Malaysia are not only grabbing at timely bargains at emerging market prices, but they are also getting so much more for their money than in many other worldwide destinations.
