Capital attraction

PUBLISHED : Wednesday, 30 September, 2009, 12:00am
UPDATED : Wednesday, 30 September, 2009, 12:00am

Malaysia is one of the only places in Southeast Asia where overseas buyers can get free title to a property rather than having to settle for a lease.

The 'Malaysia: My Second Home' programme has been reasonably successful in recruiting overseas residents, though the system doesn't allow buyers to work, only to remain on long-term visas to use holiday homes or retire.

Malaysia's property market is still definitely in the 'developing' camp, though, unlike Singapore or Hong Kong. The main focus is Kuala Lumpur where high-end condominiums have been springing up around the Kuala Lumpur City Centre, or KLCC, the neighbourhood near the Petronas Twin Towers.

Most high-end accommodation used to be in the suburbs. The change is likely to shift the ratio of high-end condos from 67 per cent in the suburbs and 33 per cent in the city centre last year to a more even 55-45 ratio in 2011.

But KLCC is still a relatively untested market, with developers rolling out a higher standard of apartment than was previously available and demanding higher prices to boot. They haven't been able to get them this year.

'The year started in a sombre mood, with global economic figures plunging to unprecedented levels and Malaysia's GDP showing a sharp drop,' a report from Knight Frank stated.

'The high-end condominium market in Kuala Lumpur continued to soften amid sluggish sales performance and downward decline in prices and rentals.'

Prices for high-end condos are down about 20 per cent from last year's peak, with apartments in KLCC selling for M$650 (HK$1,445) to M$1,500 per sqft. Although prices seem to be stabilising, they may remain under pressure because there is considerable new supply due to come on the market.

Developers are offering more attractive payment schemes. The most common is a flexible scheme of instalments, with zero down on the mortgage until the property is completed. But buyers may also be able to bargain for other perks.