Hongkongers delay home purchases in Malaysia as lockdown measures freeze market

Hong Kong buyers pause on Malaysian property as lockdown restricts movements, closes non-essential businesses

Malaysia remains a top destination for migration and retirement with its lower cost of living, despite Covid-19 outbreak

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The Malaysian city of Johor Baharu is located about a 30-minute drive from Singapore. Photo: SCMP Handout

Published: 7:00am, 28 Apr 2020Updated: 7:53pm, 28 Apr 2020

Hong Kong buyers are putting aside their plans for investing in Malaysian property as lockdown measures restrict movements, close non-essential businesses and freeze the real estate market along the way.

Enquiries about Malaysian projects from the city’s residents have dwindled by about one-third from a peak last year when scores where looking to escape from social unrest, according to industry analysts. Centaline Property Agency expects such transactions to fall by a third this year.

“In the first quarter, with the travel restrictions and movement lockdowns, we saw buyer enquiries for Malaysian assets drop significantly from their peak last year,” said Georg Chmiel, executive chairman of Juwai IQI, which operates a property portal. “Hong Kong buyers made 32 per cent fewer enquiries in March than they did in January.”

Malaysia implemented the Movement Controls Order on March 18 for a month and shut schools and non-essential businesses to help contain the Covid-19 pandemic. While some restrictions have been eased, the order has been extended to May 12. Malaysia had recorded over 5,780 cases and 98 deaths as of April 27.

Terence Law, senior principal project director at Centaline, expects the number of purchases in Malaysia by Hong Kong buyers to fall by a third in 2020. The firm recorded about 300 such cross-border transactions in 2019.

Prospective investors were taking longer to decide on buying overseas properties because of the lockdown measures, Law added. The restrictions, not only in Malaysia but globally, have made it more difficult for owners to sell, even though cash-rich buyers were largely unaffected by the pandemic.

The waiting may be a blessing as Hong Kong’s pegged currency has strengthened against its regional peers through the health crisis, specifically by 7 per cent against the Malaysian ringgit. Malaysia’s appeal, with a large Chinese population and lower living costs, remains undiminished.