Rolling out the red carpet
Malaysia has long been a destination of choice for foreign buyers looking to combine quality of life with modern conveniences and moves by the Malaysian government to relax many of the rules for property acquisition by foreigners have undoubtedly helped catalyse new investment in Malaysia.
So too have the aggressive financing packages on offer from developers and financial institutions - in some cases asking only 5 to 20 per cent down payments with the balance upon completion and no interest payments during construction. This has created an attractive environment where it has never been easier or potentially more profitable for foreigners to buy Malaysian property, particularly when purchasing from developers, for whom procedures are facilitated by the Ministry of Housing.
The Malaysian government's Malaysia My Second Home programme has also proved successful in attracting foreign investors. Foreigners of any age are able to take advantage of the programme, which allows foreigners to buy property in the country. Buyers wishing to use the scheme must purchase residential property with a value of more than M$250,000 (HK$575,246).
The scheme also allows foreign buyers who are older than 50 to not only buy property but also to work in Malaysia if they have special skills required in a critical sector of the economy. Depending on the age of the applicant, fixed deposits of M$150,000 and upwards are required, or applicants can qualify by proving that they have an offshore pension of more than M$10,000 per month.
With domestic and global economic indicators pointing to a more stable environment, Amous Lee, Hong Kong-based director of international investment at Knight Frank, believes that the current interest rate environment and ease of entry will make Malaysian property one of the better yielding investments in the short- to mid-term, rating well against its neighbours and offering a solid hedge against inflation: 'There is a consensus that current price levels have not yet peaked and that the next six to 12 months will be a very good time to invest here,' he adds.
As evidence of the preferential treatment being shown to foreign investors, Lee points to the Dedaun development from Selangor Dredging Berhad, a high-end development of 38 freehold low-rise condominium units located in Kuala Lumpur's city centre just minutes away from the Petronas Twin Towers.
'For Dedaun', explains Lee, 'the developer gave us exclusive rights to showcase this development to our Hong Kong clients. It has not even been previewed in Malaysia. They're giving HK investors the privilege to select the best units, including the penthouses.'
Other high-end freehold developments with prime locations in the city centre attracting foreign investment include the luxury apartment developments myHabitat2 and The Regent Residences, represented by CBRE and Colliers respectively.
Despite the relaxation of government rules and enhanced transparency attracting foreign buyers, Lee nonetheless advises first-time investors to take their time to research locations and developers' backgrounds, and to check out for themselves the claims that quality and specification levels are reaching parity with traditional high-flyers Hong Kong and Singapore.