Malaysia Has Strong Demand For High End Property

Posted on October 25, 2008
Filed Under Asia

One of the major Asian Tiger economies Malaysia has consistently had stronger economic growth that of America and the European Union. Malaysia’s economic growth exceeded 8% in each year of 1989–1997.

The turmoil in the US economy is not evident in Asia. Malaysia is buoyed by the many surplus funds in the region, particularly from wealthy investors from the Middle East, its compulsory pension schemes and sovereign investment funds.

Property in Malaysia is a strong and established market

In the current uncertain global economic situation in the major markets of the USA and UK, retirement planning for the Malaysian non-welfare state, with its trademark absence of taxation-funded old-age pension has seen a flight by local investors into the quality of on-shore real estate investment. Listed property trusts have operated in Malaysia for the past twenty years, and their strict regulation (they must be sponsored by financial institutions) has assisted even Malaysians with lower pension funds to invest in Malaysian real estate.

Malaysia does not have the uncontrolled housing development of some other Asian countries, having adopted in the mid-1970s development control legislation patterned on the British Town and Country Planning Act. This to some extent props up prices, particularly in the rapidly increasing urban areas. Its developed legal system keeps away excesses of developers, which are common in countries with less -developed legal systems, and the system also offers a large degree of protection for property buyers and investors.

Why is the Malaysian market soaring?

The thriving Malaysia property market is fuelled by ongoing economic growth; a naturally-growing population averaging 1.8% long-term; increasing migration from country to city; the growth of the state-sponsored pension fund; expansion of economic activity by nearby Singapore; and the 10-year-old “Malaysia- My Second Home” programme.

In what sort of Malaysia properties do affluent locals wish to live?

The buy-to-rent market is growing in Malaysia, fuelled by increasing incomes of a growing young, educated professional class.

Tunisia has seen a launch of high-end properties in many parts of the country, due to the keen interest from locals, as well as foreigners. Property developers believe that demand will remain steady, and are careful to build high-end projects in prime locations such as the city centre and near certain attractions like the formula 1 race track along Sepang Goldcoast, targeting niche markets.

Malaysia is a coastal paradise and some of the new touristic resort developments like The Palm and Tropical Cluster which are being built as part of Sepang Walk along the Goldcoast near the Sepang Formula 1 race circuit are very popular with foreign investors. The Palm was one of the fasting selling developments in the last year and was almost completely sold with in a matter of weeks.