54 | MALAYSIA WORDS | Amit Katwala
SNAPSHOT
www.opp.org.uk | APRIL 2011
Malaysia’s economy is growing at a rapid rate, with an urban boom the result. How will this aff ect the country’s property market, and is it a good investment?
L
ike many of its South-East Asian neighbours, Malaysia is developing at a remarkable
rate, and is now a mix of the modern world and a developing nation. The economy is geared towards urbanisation and industrialisation, and there are a growing number of expatriates living in Kuala Lumpur. How have the growth in industry and the infl ux of people moving into the cities affected the property market? OPP fi nds out in this month’s market snapshot.
Property Prices The Malaysian market saw its strongest price increases of the century so far in 2010, with the national house price index rising 6.2% y-o-y to Q3 2010, following year-on-year increases of 6.2% and 5.7%
for the previous two quarters. The growth was especially strong in
the capital, where the house price surged almost 10% year-on-year to Q3 2010. The average house price was MYR196,022 ($64,158) with the average price in the capital at MYR432,181 ($141,453). As well as an increase in prices,
there has also been an increase in sales according to the Valuation and Property Services Department (JPPH). From January to November of last year, there was a 12.2% year-on-year rise in transaction volumes, while the value of transactions rose 35%.
Economy The Malaysian economy grew by 7% in 2010, following a contraction of 1.7% in 2009 due to the global
Malaysia in the news...
Malaysian new build prices to rise 13% this year 17th March 2011 The average price of newly developed residential properties in Malaysia is expected to grow by 13% year-on-year in 2011 according to a new survey published by Real Estate & Housing Developers’ Association Malaysia (Rehda).
Malaysian sales set to break records 21st January 2011 A total of 342,179 Malaysian property transactions worth RM96.77 billion (£19.8 billion) were recorded between January and November last year, implying that the country’s full-year market could reach a record-breaking RM100 billion(£20.5 billion), Knight Frank’s Malaysia managing director Eric Ooi said this week.
Rising demand goes on for key Malaysian cities 24th December 2010 Demand for overseas property opportunities in Malaysia will continue to rise next year says Datuk Abdul Rahim Rahman, chairman of Rahim & Co Chartered Surveyors. He believes that foreign buyers remain strongly interested in doing deals on “residential transactions in urban areas” and that Penang, the Klang Valley and Johor are all popular locations.
Booming Malaysia market attracts unlikely investors 10th December 2010 The Malaysian property market is booming, and two timber companies in the country have taken the unusual step of moving into property development to diversify their income. The country’s National Property Information Centre (Napic) released statistics showing that the price of residential property increased by 16% on average during the first half of 2010.
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economic crisis. According to Abdullah Thalith, the director General of JPPH, “the recovery of the Malaysian economy has reinvigorated the market”.
Rental yields Gross rental yields fell gradually through 2010, according to Global Property Guide research. Gross rental yields on condos range
from 5% to 7%, while for bungalows they are typically around 4%.
Legal Restrictions Although the Malaysian government liberalised some of the restrictions on foreign ownership of property back in 2006, it has since reversed this decision somewhat. From last January foreign buyers
can only buy properties worth less than MYR500000 ($145,383), which is twice the previous level. Anything
over this has to be approved by the state authorities.
Tourism Although most of the demand for housing is coming from urbanisation or from expatriates working for large multinationals, tourism in Malaysia is on the up too. Preliminary estimates from Tourism
Malaysia indicate that the country received 18.24 million visitors over the fi rst nine months of 2010, which is an increase of 4.9% year-on-year. The long-term prospects for Malaysian
tourism are equally as good, according to Business Monitor International, which notes that the tourism industry benefi ts from the relatively stable political situation and strong government support. There are a number of tourism
options, ranging from the conferences and events sector to beach holidays, and a number of new hotel resorts have recently opened.
Market Snapshot Malaysia
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