IWhile builders and developers in Bangladesh are finding it increasingly difficult to keep up the pace of their works in the face of constricted demands, those in Malaysia are finding increasing prospects in the sector. The driving force behind industry confidence in the property market in Malaysia can be attributed to the Malaysian government's blueprint for economic growth and diversification for 2006-2010. The government's ninth Malaysia Plan, as it is called, was announced back in April 2006 and contains impressive provisions for infrastructure improvement and general economic development that analysts believe will have a positive impact on the real estate market across the nation.
Malaysian Property Market Trend
Currently real estate in Malaysia is witnessing growth in purchase of property in the capital city of Kuala Lumpur and within the new coastal resorts. In line with the demand investment is growing in those areas with foreign investors from China, the US and Japan joining forces.
The surging economic activity in Malaysia has led to a high demand for quality commercial and residential real estate lettings to cater for the needs of an ever-growing expatriate community employed in and around the city of Kuala Lumpur.
Properties that are outside government plans are being sold to international property developers with impressive guaranteed rental yields of six to ten percent.
New resorts, particularly in coastal areas south of Kuala Lumpur, are being built in response to demands generated by growth in the tourism sector. These holiday resorts have great potential for second home buyers seeking an exotic overseas home in the sun. Moreover, property purchasers are getting impressive returns on their buy-to-let and off-plan investments.
Foreign Investment
The Malaysian government has recently relaxed terms and conditions of home ownership rules for foreigners and introduced tax incentives, making property an easier and more lucrative option for foreign ownership. The new provisions are aimed at stimulating the real estate market and clearing the inventory of commercial projects constructed during the boom years before the Asian financial crisis.
As of April 25, 2001 non-Malaysians are allowed to purchase all types of properties without having to set up a company with local equity partners. Now foreigners can buy land on which construction has not started and borrow from local banks to finance their property purchases. Moreover, foreign companies are allowed to own offices costing RM250,000 and above without local equity partners.
However, the regulation that any property bought by non-Malaysians must be priced at a minimum of RM250, 000 (about US$65,789 on 5-9-2001) has not been withdrawn.
Why Malaysia is an Investment-friendly location
• The government of Malaysia is actively encouraging foreign property investment by creating an investment-friendly environment through a number of tax incentives and liberalization of laws governing property purchase by foreigners.
• Government's plans for economic development include improving on a massive scale the infrastructure of the country. .
• Malaysia has a stable economy as well as a stable government. And it boasts a modern and cosmopolitan lifestyle.
• English is widely spoken in Malaysia.
• The low value of the local currency, the ringgit, compared with the euro, dollar and pound sterling, allows foreign investors to buy a lot more for their money in Malaysia.
• Property prices per square metre in all major Malaysian towns and cities are much cheaper than those in London and New York.
• There is high demand for quality real estate from an affluent expatriate market.
• Among the 53 Commonwealth countries, Malaysia is one of the top three countries to have the greatest number of tourist arrivals, according to the World Tourism Organization.
• Between 2000 and 2005, tourist arrivals in Malaysia rose by more than 160%.
• Malaysia has a year-round tropical climate by virtue of being located near the Equator, which is ideal for tourism.
• Natural disasters such as earthquakes, volcanoes or tornados have not occurred in Malaysia.
• Investors can get apprised of the best and most current investment opportunities in Malaysia through IPIN (International Property Investment Network).
ET Report by Chy. Asaduzzaman
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