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Discontinuation of The Reduction Of Fixed Deposit Placement Based On Property Purchase And MM2H Approval By Government Pension
Kindly be informed that MM2H Centre has discontinued the reduction of Fixed Deposit placement based on property purchase worth RM1 million and above in Malaysia. Also discontinued is the MM2H...
Malaysia Real Estate: A Good Value Print E-mail
Tuesday, 21 April 2009 12:21

Just as most other East-Asian countries, export-dependent Malaysia is suffering from the global economic slowdown. The Malaysian Institute of Economic Research (MIER) recently announced that the country's economy will shrink by 2.2 percent in 2009, according to AsiaOne, a regional news portal. This comes as a revision of the economic think-tank's earlier and more optimistic forecast that predicted 1.3 percent growth.

In addition, MIER suggested that the Malaysian central bank should look at cutting the current interest rate from 2 percent to 1.5 to minimize the damage resulting from falling exports and to keep the economy afloat. The think-tank also warned that if exports continue to shrink severely the country's economic outlook could be much worse. As it currently stands, MIER predicts the Malaysian economy will begin to grow by 3.3 percent in 2010.

The real estate sector

The country's property sector is holding up better than expected, according to The Star, Malaysia's English daily. The real estate market never fell under the spell of speculators and as a result didn't see the kind of hyper-activity neighboring countries attracted.

While prices in the region climbed dramatically, property appreciation in Malaysia remained subdued. This may have protected the country's real estate sector from experiencing severe price declines. Because Malaysia never had drastic price increases, "[it] is not suffering from any sharp price decline," Yu Kee Su, Executive Director of Malaysia Property Inc., told The Star.

Still, as expected in a global recession, international investment in the real estate sector has slowed somewhat. Foreign buyers affected by the financial crisis have adopted a wait and see altitude and are opting to sit on their money. However, those investors who choose to buy will find a good value.

Countries in the region, such as China, Singapore, and Vietnam, have all seen sharp price declines ranging between 20 to 30 percent, according to The Star. However, in Malaysia only Kuala Lumpur has suffered from similar drops. Despite the global economic recession, property prices outside of the capital have remained stable. With current interest rates at a 25 year low and developers willing to sweeten deals by throwing in extras, now is a good time to buy argue market experts. Agents say they have seen rising interest from foreign buyers who see the country's real estate market as undervalued.

In a bid to attract more interest, the country is revamping its already popular Malaysia My Second Home (MM2H) program, according to Property Report Asia. The program, which was originally put in place to promote Malaysia as an international retirement destination, has attracted over $1 billion investment in the property sector. The new version of MM2H will also attempt to focus part of its efforts on expanding its reach beyond the average international property buyer to attracting high net-worth individuals who maybe willing to invest large amounts of capital into the economy.

While Europeans have long been retiring outside of their countries of origin, the Japanese and South Koreans are just discovering the idea. Malaysia is aggressively marketing itself as a premier retirement destination in the region. The country also hopes property investors seeking to spread their risks will look at Malaysia as an option.

Looking ahead

Over the last decade, Malaysia has gone from relative obscurity to a popular tourist destination. With its 'Truly Asia' advertising campaign, the country continues to aggressively market itself as a tourist destination that has it all - from white sand beaches with turquoise waters to lush tropical jungles.

Real estate prices in Malaysia are attractive, especially compared to other countries in the region. The benefit of investing in the country's property sector is the greatest for those who come from countries whose currencies have a strong exchange rate against the Malaysian ringgit. The local culture, historical and natural heritage and diverse cuisine have a broad appeal. It would hardly be surprising if the property sector continues to grow and attract international investors.

Written by:Yemisrach Kifle


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