Looking for a smart property investment abroad? Forget Singapore and Hong Kong and look to Malaysia for great value homes
Malaysian homes have just got more affordable for foreign investors, thanks to a new government policy meant to stimulate the property market at a time of great global economic uncertainty
If you’re looking to invest in property, now might be the right time to look at Malaysia. A long-term favourite with foreign buyers thanks to its great weather, fantastic food, low cost of living and widespread use of English, now Malaysia is aiming to attract more foreign investment through price incentives.
Announced last October, the Malaysian Budget 2020 was themed “Driving Growth and Equitable Outcomes Towards Shared Prosperity”. In his key policy address, Minister of Finance YB Lim Guan Eng highlighted four key aims: enhancing economic growth in the new economy and digital era; investing in Malaysians and improving the country’s human capital; creating a united, inclusive and entrepreneurial society; and enhancing public institutions and finances.
Much of this is to be achieved with the help of economic growth driven by increased foreign direct investment into Malaysia.
One key policy Lim hopes will contribute towards this is his announcement that the threshold for foreign ownership of high rise property would be lowered from one million ringgit (US$240,000) to 600,000 ringgit (US$144,000).
This policy should be particularly attractive to Hongkongers, says Kashif Ansari, group CEO at IQI Global, whose data tracks Hong Kong buyers in a category alongside other Chinese buyers: “The government wants to provide stimulus to the property market at a time of great global economic uncertainty and travel restrictions. Developers in Malaysia know how to cater to both local and overseas buyers in terms of the amenities and fixtures that they offer. Reducing the minimum price will increase demand.”
The original threshold was designed to insulate local Malaysians from the higher purchasing power of Hongkongers and other foreign buyers. However, a glut of completed properties that have gone unsold have spurred the government to adjust its policy, with the hope that foreigners would acquire the outstanding stock.
“The 600,000 ringgit benchmark would make close to 50 per cent of unsold residential stock nationwide available to foreign buyers, according to the data at the time of announcement,” explains Foo Gee Jen, group managing director of CBRE|WTW.
Not everyone is convinced the policy will have a significant impact. Terence Law, project director at Centaline Property Agency, points out that many Hongkongers look to invest in properties already above the one million ringgit (US$240,000) mark and that in Medini Iskandar Malaysia, a suburb in Iskandar Puteri, there is no minimum price threshold for foreign property buyers as the area has been designated a special economic zone.