After my fruitless search for a shoebox flat in Wan Chai, the hunt switched to Kuala Lumpur. Why Malaysia? Well, Hong Kong Island is unaffordable now and cannot be said to represent value for money when a unit measuring less than 350 square foot, net or gross, has a price tag of HK$4-5 million. I decided to see what the same amount buys in Malaysia. Although currently moribund, thanks to chief executive Leung Chun-ying’s swinging 15 per cent stamp duty, there is no sign of Hong Kong prices dropping, even though transaction numbers have tanked. The market is at the top of its cycle, even if stagnant.
Widening the net
Time to property shop elsewhere. You find everyone has an opinion on this. Buy in Penang, I was told. Forget Kuala Lumpur. Why? Penang is Chinese, prosperous, busy property market, big units, ocean views, I was told. Big potential for mainland Chinese. Or if you want old, buy a shophouse in Georgetown, US$1m (HK$7.76 million) will see it bought and renovated. That didn’t sound bargain basement to me and that part of town is steamy and humid with no views. That I worked out for myself, from the air-conditioned comfort of the Trader’s hotel in its midst.
Penang is certainly busy. The beaches, night markets and big hotels have become popular with rich Middle-East folk, so it’s thronged with ladies in full black burkas. They must be dying in the heat as they trot uncertainly along the uneven pavements in the slipstream of their husbands, who in stark contrast, stroll along in shorts and sandals. All good for business, but for me it’s a bit too busy these days. I liked the old idea that Penang was a bit sleepy. Then came The Tooth Trauma. It was not the E & O’s fault, it’s a lovely hotel, but I broke the cardinal rule of eating seafood while enjoying their justly-famed Sunday buffet. Never bite hard on anything crustacean. I chomped confidently on an innocuous-looking deep-fried oyster that containted a vicious little pearl. Crunch. A huge molar snapped in half and at HK$25,000 for the dental repairs and crown, it was the most expensive meal I’ve ever half-eaten. Call me shallow, but that painful episode rather coloured my view of Penang. Investment decisions have been based on less.
Back to Kuala Lumpur
So back to KL., which is full of building sites and gleaming tower blocks under construction. Many of them are hotels. It seemed even busier than a second-tier city in China.
And the prices seemed about one fifth of Hong Kong, literally. Example: my friends showed me a 2,800 square foot ground or first floor flat, there was a choice. Two parking spaces, shared pool, garden, mature trees, walls all round, 24-hour guards – they take security seriously here – and all a short distance to the MRT station and KLCC – around the Petronas Towers. Only eight units in the block, lowrise with four storeys, hardwood floors, fitted kitchens, aircons, lift. It was an old building converted four years ago, with stunning views of the Twin Towers. Asking price once converted to HK$ at 1 Malaysian ringgit to HK$2.5, it came out at under HK$5m. That’s for 2,800 square foot, with vast kitchen, sitting and dining area, three huge bedrooms, three bathrooms, maid’s room, two wide terraces. A bit different to 350 square feet in Wan Chai.
Monthly rental would be about HK$20,000 - low by HK standards, but standard for KL. So I sounded out a KL property lawyer. Are the mainland Chinese buying up KL yet? No, he said. Not yet. So who is buying the towering glass residential blocks? They are sold off-plan in the Middle-East to investors who never visit and never bother to get tenants, he said. “Malaysia’s a Muslim country, they see it as somewhere to put their money. So if you live in one, you may be one of a few occupants. It’s peaceful, but it means few people pay the management fees so no maintenance gets done.” I see. So what should I buy? Difficult, he said. The best KL property is bought, and held, by locals, to each other. So how about out of town bungalows in the suburbs? They seem unbelievably cheap, often with giant gardens. “No,” he replied sharply. “Not unless you like monkeys. Big problem. They can be nasty.” A good tip. This is not as simple as it seemed. More KL property tales tomorrow. Check out two good websites for Malaysian property: iproperty.com and propwall.com