Malaysia Property
The Malaysian government has introduced the ‘Malaysia My Second Home’ campaign to promote the benefits of owning property in Malaysia.
With a young (around half of the population is under 25) well-educated population, strong ownership laws, no capital gains tax and attractive mortgage rates, our tip for the top is Malaysia property.
Over the next 10 years more people are expected to move from the countryside to the big cities. Aside from internal population movement, Malaysia’s population is increasing by two per cent (500,000) every year and the World Bank expects the population to continue growing annually by 1 per cent until 2050.
The Malaysian government has introduced the ‘Malaysia My Second Home’ campaign to promote the benefits of owning property in Malaysia and as a result it has abolished rent controls and eased foreign ownership laws.
The Malaysian inflation rate peaked at a 26-year high of 8.5 per cent in July but economic growth in 2007 has also been strong and is expected to end the year at between 6 and 7 per cent. Despite the high inflation rate, the Central Bank of Malaysia (Bank Negara) has kept interest rates low at 3.5 per cent and expects inflation to fall considerably in 2009. In October Malaysia reported that international currency reserves now total $108 billion and this is helped by having large oil and gas reserves.
Bank Negara figures show that annual national Malaysia property price growth has not exceeded 6 per cent in any year since 2001 and when adjusted for inflation prices of property in Malaysia actually decreased by 0.7 per cent in 2005 and 1.4 per cent in 2006. In fact, Malaysia property prices are still lower than they were in 1997 just before they slumped by almost 40 per cent during the Asian financial crises, meanwhile average salaries have doubled over the past 10 years.
These price falls were enhanced by a massive over supply of new apartments between 1996 and 2005, especially in the capital Kuala Lumpur (KL), where the total housing units in the city actually doubled between 1980 and 2000. However, a government study revealed a shortage of 36,000 properties in Kuala Lumpur for medium cost housing and an oversupply of 62,000 units for the upper income sector, so a safer investment strategy would be small and cheap property in Malaysia rather than big and expensive.
According to the RICS (Royal Institute of Chartered Surveyors) ‘Asian Housing Review August 2008’, average Malaysia property prices are around £30,000 while in KL they are closer to £65,000.
Other large cities to consider include Johur Bahru, Ipoh, and Kuching.
First published in February 2009.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
See Also: Malaysia (7)
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