Malaysia Property Market Outlook
22 April, 2020
Malaysia is a hidden gem for affordable properties with capital appreciation potentials, says Dr. Theresa Fok, Founder and Managing Director of Jade Land Properties (HK) Limited.

 

A promising investment destination

According to The World Bank, Malaysia’s economy has been on a gradual upward trajectory since the Asian financial crisis of 1997-1998, averaging a growth of 5.3 percent in 2018. There are indicators of improvement in the property market. The persistent pursuit of large-scale projects and a high-value economy will facilitate new growth drivers and opportunities.

For Kuala Lumpur, the government seeks to transform the capital city into a major financial hub in Asia through the construction of the Tun Razak Exchange (TRX). The initiative has attracted more and more professionals to work in the city, as well as investment from foreign corporations. Kuala Lumpur, for instance, is home to Alibaba Group’s first office in southeast Asia.

Of all the property sectors, the hotel industry is among the best performing. The overall hotel occupancy rate in Kuala Lumpur City Centre remains resilient at 79%. Due to Malaysia’s natural geographical and cultural diversity, tourism continues to be an important economic activity, driven by popular states such as Melaka, Penang, Borneo and others.

Penang, the Silicon Valley of the East, received the highest approved foreign direct investments in the country at RM8.5 billion in 2017. This favourable indicator reflects that the general sentiments are improving. With the expansion of the Penang International Airport enabling more international airlines to fly directly into the state, tourist arrivals are forecasted to increase from the existing annual visitors of 7.8 million to 16 million. The RM46 billion Penang Transport Master Plan will further upgrade the city’s infrastructure with the addition of LRT systems.

“Given the rapid development as a result of the government’s commitment to stimulating and sustaining economic growth, Malaysia is a sound and secure choice for investors seeking diversification in their portfolios,” says Fok.

The Ringgit has weakened against international currencies over the past 5 years. Nevertheless, main capital market financial activities and monetary policies will influence emerging market currencies.

Financial activities and monetary policies in the main capital markets will continue to influence the currencies of emerging markets such as Malaysia. Due to the central bank, Ringgit recovery is observable in the recent period. Active surveys by Bank Negara will help to ensure the stability of Malaysia’s financial system.

Malaysia is a short and easy flight from Hong Kong with a host of daily flights

between the two places. Malaysia has a young population with a median age of 30.3 years, which bodes well for future economic growth, and creates a strong demand for properties from first-time home buyers.

Furthermore, the government’s Malaysia My Second Home (MM2H) programme offers a 10-year renewable visa for foreigners to stay in the country. Aimed at promoting Malaysia as an ideal place to stay and invest, the initiative has successfully attracted many Hongkongers in their search for a safe haven for their family.

“With a predominant Chinese population, Penang does not pose a culture shock for Hongkongers,” Fok observes. “In fact, the place feels like home and my clients are able to quickly and seamlessly adapt to the pleasant and congenial living environment.”