Malaysia’s property market appeal

Property market continues to attract interest, but why are the Chinese such active players?

Malaysia’s economy has taken an upbeat turn. The ringgit has got stronger too adding to the country’s appeal as a good place to invest. This is according to Judy Ong, executive director of research and consultancy at Knight Frank Malaysia. Ong also cites the country’s political stability and developed infrastructure as other reasons that investors are drawn to this property market.

This is demonstrated by the continued Chinese thirst for Malaysian property. China may have attempted to restrict the outward flow of capital, which has slowed down property shopping sprees by individuals and companies. However, stated-owned enterprises do not fall under this category and manage to still buy real estate. Hence the majority of property purchases in the country are from the Chinese. A property market where 35 percent of all transactions are from foreign purchasers.

So despite obstacles being put in place to restrict the Chinese’s spending power, there remains a strong appetite. The interest in Malaysia is not expected to slowdown anytime soon either. Ties between the countries and similar cultures are cited for reasons for this.

Although currency does play a part, Knight Frank reminds us that there are still fundamentals aside from this that drive the market. The real estate consultancy’s Global Currency Report looks at how currency can play a role for global luxury residential property. Whilst changes can mean investors shift their focus such as the recent appetite for property in the UK from Asia, factors such as yields remain important. Scooping up a bargain due to a strong local currency should not be a reason alone for an overseas property investment.

Investors need to look to the long term. Something that many Chinese have considered due to Malaysia’s role in the China’s Belt and Road initiative that will help to boost trade. It is unsurprising that Malaysia is Chinese developers third popular destination according to Knight Frank.