'Incredible' value in Malaysia

Investors in Asian property should look no further than Malaysia for good value and user-friendly regulation, according to a developer.

Project director for planning and business development at E&O Property Development, Mohd Razeek Hussain, claims that foreign investors are initially attracted by architectural style, tropical weather and scenery but the bottom line is that Malaysian property is well priced....

Article Date : Thursday, July 12, 2007

Speaking to Property Report, he said: "For me, the biggest lure is the value when compared to other countries.

"Where else can you buy a landed property this close to the water at such prices?"

Mr Hussain said an additional bonus was that other areas like Phuket and Bali demand cash up front for the property but in Malaysia only a ten per cent deposit was required.

"The value in Malaysia is incredible, while ownership regulations and access to funds are straightforward," he added.

The Foreign Investment Committee recently relaxed legislation for foreign buyers, suggesting that this would boost the country's potential for property investment from abroad, the Malaysian Star reported recently.

Source: Property Showrooms

Race on to draw foreign investors

Malaysia Property News by Bernard Yong on Jul 09, 2007 By THE STAR

Malaysia has the potential to attract more foreign investors to its real estate sector and plans are already in the pipeline to do just that

MALAYSIA will be on track to become one of the favourite real estate investment destinations if further liberalisation measures and conducive conditions are in place to raise its ranking in the international market.

Faced with strong competition from other major cities around the world to attract foreign real estate investors, Malaysia has to raise its ratings in various aspects, including quality of life index and international-standard property offerings.

Globally, real estate investment markets are experiencing unprecedented growth and many countries are opening up their markets to bring in investors to their shores. From Singapore to Hanoi and Manila, the race to bring in the foreign dollars is on.

The recent relaxation of Foreign Investment Committee rulings for foreign buyers and the exemption of real property gains tax augur well for Malaysia as a destination for property investments.

Malaysia's comparative advantages include having one of the lowest property prices in the region and a relatively low cost of living, good infrastructure and its transparent land and property ownership laws.

To kick-start efforts to draw foreigners to our shores, a joint public-private sector initiative is expected to be implemented soon to make Malaysia an international property destination.

Under the plan, Malaysia's premier properties will be showcased at exhibitions overseas, with target markets in the Middle East, South Korea and Japan.

The plan to attract RM20bil worth of investment will definitely help stimulate the property industry and 140 other industries which are directly related to the industry.

Welcoming the latest public-private initiative to set up a centralised coordinating body to plan and coordinate international property promotions and road shows as timely, developers are eager to throw in their full support behind the latest initiative.

SP Setia Bhd group managing director Tan Sri Liew Kee Sin said collectively, the package of incentives had sent a strong message to the international community that the Government was "pulling out all stops" to woo them to invest in the country's properties.

"Developers should take the cue from the Government's actions to step up marketing and promotion efforts to capture a bigger share of the global real estate market which is forecast to reach US$450bil next year," Liew said.

To ensure sustained demand from the foreigners, Liew said, greater efforts were needed to create a sizeable expatriate community in the country.

"This can only be achieved through policies that welcome foreign talent to live and work here and if the country continues to attract significant foreign direct investment in various sectors of the economy.

"The Government also needs to accelerate efforts to create a more favourable business climate with investment-friendly policies in place. The corporate tax regime plays a part - at 27% (2008: 26%), our corporate tax rate is still higher than Singapore (2007: 20%, 2008: 18%) and Hong Kong (2007: 17.5%)," he said.

Sunway City Bhd senior managing director Datuk C.K. Wong said that to raise Malaysia's competitiveness, the local councils and state agencies must be prepared to change their mindsets and move towards a more efficient delivery system.

"There is also a need to overhaul the restrictive regulations, which make it difficult for foreigners to buy properties, especially at the state level.

"It takes about four to five months to register a property transaction, while countries like Singapore can have this done in seven days. The proper implementation of the public delivery system will improve our competitiveness with the more efficient countries," Wong said.

Zerin Properties chief executive officer Previndran Singhe said although a recent Real Estate Transparency Index study by JLL Research listed Malaysia as one of the most "real estate transparent" countries in the world, a lot still needed to be done to enhance its position in terms of regional attractiveness, based on the Quality of Life Index (see tables).

"We are ranked rather low in the globally accepted Quality of Life Index, which attracts private wealth. Singapore and Hong Kong, which are high in the ranking, attract huge amounts of private wealth.

"This private wealth indirectly translates into real estate investments. The future financial markets will be private wealth and private equity, and Malaysia needs to position itself to attract such funds," Previn said.

The liberalisation of the financial markets has contributed to the boom in the commercial real estate market and will be driving the market for 2007. "These institutions and funds are flushed with cash and are looking for exposure to Malaysia's commercial and residential property sectors," Previn said.

Malaysia to bank on relatively low entry cost

Property News by Bernard Yong on Jul 09, 2007 By THE STAR

WHILE cities around the region are seeing a spike in their property prices, the relatively low entry cost to invest in real estate in Malaysia will be a strong magnet for foreign investors to partake in the country's buoyant market.

Coupled with the many pluses enjoyed by the country, including the transparent land laws and system, sustainable market growth, good construction management and investor-friendly incentives, Malaysia has the ingredients to become an international property hub.

Industry players are confident that the upcoming joint public-private sector initiative to promote Malaysian properties to the international community would help the industry substantially.

The regional property boom has the potential to spill over to Malaysia as investors start looking around for better bargains.

SP Setia Bhd group managing director Tan Sri Liew Kee Sin said besides the good value of its properties, the country's stable socioeconomic climate, comprehensive infrastructure, and a good balance of thriving cities and natural wonders would endear Malaysia to many foreigners.

"Kuala Lumpur is between 30% and 1,000% cheaper than other regional cities such as Beijing and Hong Kong. In Singapore, property prices are pegged at US$1,500 per sq ft while in Beijing, the price is US$188 versus Kuala Lumpur's US$148.

"From the pricing standpoint, Malaysia still has a lot of catching up to do and offers ample upside for investors," Liew said.

The availability of loan margins of up to 70% for foreigners also makes it easy for them to purchase property here.

According to Mah Sing Group Bhd president Datuk Leong Hoy Kum, international investors have ample opportunity to pick up reasonably priced real estate with good upside potential in the residential, commercial and tourism sectors.

"It is time to tell the world the package of goodies that Malaysia offers, which include the attractive value upside in a broad range of properties that we have," Leong said.

Zerin Properties chief executive officer Previndran Singhe, Malaysia has most of the ingredients to become an international property hub and "what is lacking is to convey its story in a cohesive and holistic manner to the markets that need to know." He said the commercial sector could also look forward to stronger take-up from foreign buyers. Last year, a whopping 45% of the value of office transactions involved foreigners, as compared to 19.3% the year before and 1.9% in 2004 (see chart).

"Foreign ownership in the office and retail sectors is on the rise, and the latest initiative will attract greater interest in the other commercial sub-sectors, which are also generally undervalued," he said.

Sunrise Bhd managing director Datuk Michael Yam said foreigners could look forward to acquiring high yielding world-class quality properties at a fraction of what they had to pay abroad.

"Overall, Malaysian properties are attractive compared to those around the region, especially when it comes to luxury housing.

"Based on JP Morgan's estimates on comparison of Asia's luxury housing affordability, Malaysia has the highest ranking as the most affordable country. As a comparison, a prime property in the KLCC area costs an average of RM900 per sq ft (psf), which compares very favourably with an equivalent property in Hong Kong island at RM10,000 psf and Singapore at RM6,000 psf.

"Only properties in Bangkok and Manila are similarly priced as those in Kuala Lumpur," he said.

Economic growth and incentives to win over investors

The Star

Monday July 9, 2007

THE increasing demand for luxury properties such as condominiums in Malaysia is due largely to the nation's socio-political stability, accommodative policies and positive image globally, analysts said.

Prime properties located within the vicinity of the Kuala Lumpur City Centre (KLCC) cost an average of RM900 per sq ft (psf), lower than the RM6,000 psf in Singapore and RM10,000 psf in Hong Kong.

OSK Investment Bank research analyst Mervin Chow said the recent exemption from the real property gains tax (RPGT), the sustainable economic growth and a slew of other incentives to attract more foreign investors would continue to stimulate the local property market and the number of transactions was expected to increase.

He is optimistic about the high-end property segment, but is still concerned about the overhang that continues to plague the overall sector.

According to the Malaysian Property Market Report, in the fourth quarter of 2006, the total unsold residential units in Malaysia fell by 11% quarter-on-quarter.

Chow said although there was a slight relief, the total unsold residential and unsold newly launched units in 4Q'06 amounted to 170,583, of which the bulk was represented by Selangor and Johor (28.7% and 25.4% respectively).

“The bulk of the overhang units were represented by those units priced less than RM250,000 in Selangor (24.4%) and Johor (21.1%).

“On a macro scale, total overhang of residential units priced less than RM250,000 (the lower-end properties) in the country represented about 84.4% of the total country’s residential overhang,” he said.

Chow added that the oversupply situation of the lower-end residential properties in the country might potentially hamper the sales and future launches by developers with prime focus on this segment.

“Nonetheless, the success story still ultimately depends on many other factors, including the “perfect” location, right product mix, niche market catchments and the right strategy deployed,” he said.

Meanwhile, analysts expect the liberalisation of the property market to put the sector on a level playing field with regional countries.

The Government's move earlier this year to waive the RPGT and relax foreign ownership restrictions on residential properties worth over RM250,000 has benefited the high-end segment of residential properties and has set new benchmark prices.

Analysts believe the low-to-medium property segment may be the next in line to receive a government boost.

“We believe that the level of foreign property buyers' interest in Malaysia has increased recently, but not significantly.

“With our relatively affordable property prices, cost of living factor and security, we are an attractive country for foreigners. In the past, Kuala Lumpur, Penang and Malacca were the top choices among foreigners when it came to owning homes. However, of late Johor has become a focus and is attracting investors,” an analyst said.

High-end property prices in Kuala Lumpur, Penang and Johor rose faster at 8% annually, surpassing the national housing price index's average gain of 3.7%.

Moreover, the gradual strengthening of the ringgit against the US dollar is also good news for foreign buyers due to the potential foreign exchange gains and capital upside.

An industry player pointed out that price aside, international buyers were also attracted to prime areas like the KLCC, which was “world class” in terms of accommodation and facilities.

“The residential market is getting very competitive, with developers starting to sell homes as 'lifestyle' products,” he said.

He said foreign buying interest, particularly in Kuala Lumpur's prime and established locales, had seen steady growth.

Malaysia Investment Property is Hot in Kuala Lumpur and Other Cities

March 3, 2007 @ 8:46 am · Filed under Malaysia Properties

Cash-rich Indians, including high-profile businessmen and film stars, have found a new property market in Malaysia. Wealthy Indians are investing heavily in residential properties in Kuala Lumpur and other cities after the Malaysian government relaxed rules regarding foreign ownership of property in December 2006.

The move has breathed fresh life into the Malaysian housing property market, which has been witnessing a slump for the past two years. During the past two months, more than 700 Indians have purchased properties in various Malaysian cities, according to government officials. However, they were reluctant to divulge the names of buyers. “They include businessmen with business interests in South East Asia, high net worth individuals and film stars,” the sources said.

As per the changes in ownership rules, foreigners can purchase residential properties valued above Malaysian Ringgit (RM) 250,000 a unit (which works out to around Rs 32 lakh), without the Foreign Investment Committee’s approval from December 21, 2006 onwards.

On December 20, the Prime Minister’s department said in a statement that there would no longer be a limit to the number of residential properties that foreigners can own, or any conditions upon their usage.

“We have launched a marketing initiative called ‘Malaysia: My Second Home Programme’. The programme allows people from all over the world, who fulfil certain criteria, to stay in the country as long as possible, on a social visit pass with a multiple entry visa,” Malaysian tourism minister Datuk Seri Tengku Adnan Tengku Mansor told ET. According to government data, the total number of residential units on sale during the first half of 2006 went up to 22,185 from 15,083 units in the same period a year earlier.

The move has encouraged foreign investors to purchase high-end residential properties in the country. Owing to this, the foreign currency inflow into Malaysia shot up, and the property and construction sectors got a boost. “We have sold over 10,000 houses already, bringing around $1.5 billion to the government’s kitty,” said Malaysian government officials.

Each buyer is allowed to purchase up to two residential houses at a minimum price of RM150,000 each, except for certain states like Johor, Malacca and Penang, where the minimum price remains RM 250,000. The rules relating to foreign ownership of property have been changed drastically to make the sector more attractive.

Earlier, foreigners needed an approval from the Foreign Investment Committee (FIC) for any purchase above RM 250,000. Moreover, though they were allowed to buy properties for own use, they could not use these assets for investment purposes. The demand for high-end serviced apartments and well-located houses is also being driven by the large number of expatriates working in Kuala Lumpur. Real estate agents said that new properties in Kuala Lumpur are being sold to international property developers with guaranteed rental yields of between 6% and 10%.

Source: Economic Times