Despite challenging economic turns, property is still the safest asset for a steady long-term investment. Real estate as an asset has one of the sturdiest ROI (return on investment) as it safely maintains its value in turbulent economic times, and promises a handsome return during an economic boom. Currently the Malaysian market is positioned to benefit buyers as market sentiments are coupled with the weakening ringgit. As infrastructural developments continue to enhance the appeal of Greater Kuala Lumpur, the prospect of owning real estate in Malaysia is looking bright. This is a good time for foreign investors and expatriates to take advantage of the situation and purchase real estate.
Your second home
Malaysia is an attractive place to buy property, as it is one of the few countries that allows foreigners to purchase property under a freehold title. With the introduction of the Malaysia My Second Home Programme (MM2H), MM2H residents enjoy numerous benefits with their 10-year renewable social visit pass and multiple visa entry. They can purchase any residential property in Malaysia in accordance to a minimum price established by the different states, have the option of either bringing their car over or purchasing a tax-free local car, are allowed to take on contract jobs or undertake in business and investment ventures.
The low cost of living, first class medical facilities, modern infrastructure and rich colonial heritage have attracted many foreign nationals to participate in the MM2H programme. Ishihara Shotaro moved to Malaysia in 1992. As there were no stringent restrictions and regulations in obtaining loans and properties for foreigners, it was an easy choice for him to make, and he was able to run his own business.
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Capitalising on versatility
Zerin Properties Private Wealth-Real Estate Consultant Natasha Gideon says Malaysia is a great place to invest in with so many rapidly developing areas with top-notch amenities to match. The upcoming HSR (High Speed Rail) linking Malaysia to Singapore is another good reason to invest, as is the fact that the Kuala Lumpur City Centre is one of the most vibrant in the region with many owners listing their investment properties on sites like Airbnb for secondary income.
Malaysia ranks as a favourite travel destination, and many visitors prefer the unique experience and price range of what companies like Airbnb have to offer versus traditional hotel stays. Based on a report released in 2016 by AsiaOne, homeowners in several hotspots such as Langkawi, Melaka's Jonker Walk, Penang and Taman Pelangi in Johor Bahru can rake in over RM2,000 weekly; while properties in Bukit Bintang in Kuala Lumpur can make upwards of RM1,500 weekly. This proves how property investment is versatile and how riding the wave of the right business venture can be profitable.
Gideon elaborates that Malaysia is still developing which means we still have so much potential for growth. With the current economic situation, it's an even better time to start making investments, while purchasing power is still in the hands of the buyer.
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Getting it right
As the minimum purchase price for foreigners is RM1million in several states, try looking into hot property areas like Kuala Lumpur where there is the greatest room for capital appreciation and rentability. In Kuala Lumpur, you should look into where the main MRT lines will be coming up at, as well as new economic drivers such as the Tun Razak Exchange.
Whether you buy the property to live in or as an investment, getting it right is crucial. You won't incur massive losses on a bad purchase, but recovery will take time. A good tip in uncovering hotspots is to obtain plans from the local town council, or the Land Public Transport Commission (SPAD) showing new public transport infrastructure. Future alignment of local transportation lines and corridors will be an indicator for potential population catchment areas.
The HSR will have two stops in Klang Valley – Putrajaya Sentral and Bandar Malaysia. These stops are poised to become integral economic hubs, and demands for residential property will increase in the surrounding areas. The HSR will stop at Ayer Keroh, Batu Pahat and Iskandar Puteri, and is bound to increase interest in the long run. Iskandar Malaysia has generated various foreign investments in Johor, and with the increasing number of multinational companies setting up office in Iskandar and the three HSR stops, investment in property here will reap benefits for the future.
