Malaysia is turning into the darling of Chinese developers as mainland investors turn their backs on market restrictions in Hong Kong and Singapore and bet billions on cheaper housing and higher returns there. State-backed Greenland Group announced this month a US$3.3 billion deal in two residential and hotel projects in Malaysia, joining smaller rivals Country Garden, Guangzhou R&F Properties and Agile Property, which have invested a combined US$2.7 billion in Malaysia in the past two years. Last year, Chinese institutional and retail investors invested US$1.9 billion in real estate in Malaysia, exceeding the US$867 million invested in Hong Kong and US$1.8 billion in Singapore, according to real estate consultancy Savills. The figure also topped the US$1 billion invested in Australia, but lagged investments from China into Britain and the United States. "Malaysia hosts a vast Chinese community and has policies that attract foreign buyers so it has become a new investment destination," said Greenland's group chairman, Zhang Yuliang. Zhang said Malaysia's stable economic growth, large population demand in Johor Bahru, the city where the group is investing and its proximity to Malaysia's major cities and Singapore, were reasons for the firm to invest. "Malaysia is the cheapest in the region in terms of capital city pricing," said Tim Murphy, the chief executive of property investment consultant and underwriter IP Global. "We like Malaysia also because of the strong foreign ownership level and because you can borrow money. Lenders are friendly." A 15 per cent stamp duty on non-resident buyers in Hong Kong and Singapore had deterred many foreign buyers, Murphy said.