'Overall, we believe the trend for investing in Malaysia property will be positive', says Lee. 'With the recent spike in demand and resulting rising prices for properties in Hong Kong and Singapore, it is only a matter of time before foreign investors storm back to Malaysia.

'Properties there offer both very good value and comparable quality and designs to Hong Kong and Singapore.'

Supporting this assertion, the independent Global Property Guide for 2009 ranked Malaysia in ninth place out of 91 territories analysed, suggesting at the very least that investment is likely to be at the lower end of the risk spectrum.

For foreign investors, while there is a consensus that the current outlook is for growth and rising prices, if the objective of the investment is purely monetary - as opposed to a second or holiday home - then the good news needs to be seen in perspective.

The most recent report from CBRE Research, for example, published at the end of the second quarter, supports the view that Kuala Lumpur has enjoyed better-than-expected take-up of new supply in luxury residential property recently. It cited sales rates of 75 per cent for the launch of the St Mary's serviced apartments and more than 90 per cent for Tower B of the Setia Sky Residences, both from well-known developers with strong reputations.

Against that, however, it noted that average prices in the secondary market were still in decline. For new properties, Kuala Lumpur still lagged well behind Shanghai, Singapore and Hong Kong in terms of price recovery following the recession.

Overall prices for luxury condominiums declined by 2 per cent from the previous quarter and average asking rents, although static on a quarter-to-quarter basis, were still down 3.48 per cent (at HK$8.6 per sq ft) on a year-on-year basis.

The market in new luxury properties appears determinedly buoyant, nonetheless, with buyers clearly sensing good value and future profits. Five new condominium projects were completed during the second quarter, according to CBRE, adding 1,522 units to total supply. An additional 506 units in two projects, Ken Bangsar Serviced Apartment (Bangsar) and One Residency (Kuala Lumpur City Centre), are scheduled for completion before the year's end.

Further signs of confidence can be seen coming from the developers, with three groups recently announcing significant new projects timed to take advantage of the predicted full-scale recovery of the Malaysian market next year.

Mah Sing Group has published plans to build a residential development on a 46-acre site close to Kuala Lumpur. Selangor Dredging has confirmed it will launch a project consisting of houses and apartments in Taman Melawati and a condominium in Petaling Jaya before the end of March 2010. And Eastern & Oriental has committed to projects worth more than HK$9 billion in Kuala Lumpur and Penang over the next three years.

In general, landed residential developments remain the top performers in Malaysia. However, for specific areas such as Kuala Lumpur's city centre and some surrounding suburbs, the high-end condominium markets have performed consistently well. Luxury condos have consistently generated rental yields of 5 to 6 per cent, among the best in the region.

Preferred locations for high-end condominiums are still primarily Kuala Lumpur's city centre and Mont Kiara. Other suburban locations now finding favour with foreign investors include Damansara Heights and Bangsar.