The past few years haven’t been great for the Malaysia property market. A glut of unsold units, foreign ownership regulation uncertainty and a slow overall market have all contributed to less than ideal conditions. However, there may be some hope on the horizon.
The country is predicting positive GDP growth forecasts of 4.8 percent in 2019 and 4.9 percent in 2020. This should help improve purchasing power. Additionally, Knight Frank revealed that it expects the Kuala Lumpur luxury condo market to improve this year in a recent report.
That is the market segment of interest to most international real estate investors who can only acquire Malaysian properties priced at MYR 1 million (USD 256,500) or above. Should the country’s property market be on the road to recovery, shrewd property investors should act now.
“Not many countries in the region or around the world allow foreigners to own freehold properties. Secondly, price per square feet for Malaysia property is still one of the lowest in the region,” former Malaysia Property Incorporated Vice President David Shieh told the Malay Mail last year.
Chinese real estate investors began returning to Malaysia late in 2018 after staying on the sidelines in the aftermath of last year’s election. Malaysian Prime Minister Mahathir Mohamad spoke out against foreign real estate ownership, but no new regulations have been enacted.
“Prime Minister Mahathir’s comments discouraged all overseas buyers, not just Chinese, by injecting a shot of uncertainty into the market. What our data suggests is that the decline in buyers has not been so great as sometimes believed and that a recovery is very much underway,” Carrie Law, CEO and Director of Juwai.com, explained.
Penang property market solid but glut remains
A glut of unsold units sitting on the market hasn’t impacted the Penang real estate market, according to the local government. The island’s real estate scene remains solid with the government committed to affordable housing.
“The market is very strong despite reports of (unsold) units throughout the whole country,” Jagdeep Singh Deo, Penang Housing, Town, Country Planning and Local Government Committee Chairman, said during a press conference. “We hope that in 2019, we will see more federal-initiated affordable housing programmes and measures for first-time homebuyers.”
In other Penang property news, the local government raised the real estate price floor for foreigners purchasing a home. The minimum purchase price on the island is now set at MYR 3 million (USD 742,000) for landed property and MYR 1 million (USD 257,550) for stratified unit.