Eye on Malaysia as HK, Singapore curb property investments

KUALA LUMPUR, Feb 19 — Iskandar Malaysia, Kota Kinabalu, Kuala Lumpur and Penang are set to become hotspots for foreign property investors as the Hong Kong and Singapore governments “cool” their respective overheated property industries.

Malaysia has become a preferred country for foreign property investors and is now the main focus after Hong Kong and Singapore imposed 15 per cent levies to slow down foreign investments that had overheated their property markets.

These “cooling” measures have shifted some of the surging demand for residential and other properties to Malaysia, including a Malaysian-Singapore joint-venture iconic wellness project to be launched in Iskandar Malaysia later today.

Prime Minister Datuk Seri Najib Razak and his Singaporean counterpart Lee Hsien Loong will be accompanied by the largest gathering of Cabinet ministers from both side of the Causeway for the wellness project launch, according to officials involved in the venture.

A survey carried out by iProperty revealed that Malaysia is fast becoming a preferred investment destination for Singaporeans.

In the survey conducted among 2,099 Singaporeans, 42 per cent chose Malaysia as the number one destination for overseas investment, with Australia and the United Kingdom following close behind.

“According to Bloomberg, the Singapore dollar has risen more than 5.5 per cent in the past 12 months, the second-best performer among 11 Asian currencies.

“With a stronger currency, it is likely that even more respondents would pick Malaysia’s comparatively weaker currency (increased from 33 per cent to 42 per cent) over Australia (14 per cent) as their preferred overseas property location,” stated the iProperty Asia Market Sentiment Report (H1) 2013.

Fiabci Asia Pacific executive director Dr Yu Kee Su agrees that the cooling measures will drive up Malaysia’s property market and increase purchases in Malaysia and Australia.

“These two countries are the region’s investment grade countries for property investors from China,” he said.

He pointed out that Iskandar Malaysia, Kota Kinabalu, Kuala Lumpur and Cyberjaya will be the main hotspots that foreign investors are looking at.

Fiabci Malaysia national committee member Michael Geh concurred, saying that Kota Kinabalu and Iskandar will be the fastest growing spots due to both destinations’ flight connectivity to China.

“These two destinations are in the top tier of investments with new launches but this will not necessarily drive up prices as these investors will soak up the supply of new launches to keep the industry alive,” Geh said.

iProperty chief executive officer Shaun Di Gregorio seemed to have the same view by stating investments from Singaporeans will only have a marginal impact on property prices here.

Geh said foreign investors will only form the 10 to 15 per cent of the buyers.

“This is actually good for Malaysia’s property industry with external money coming in especially at a time when our domestic market is experiencing a credit crunch and liquidity,” he said.

Meanwhile, Malaysia Property Incorporated (MPI) said only up to three per cent of property investors in Malaysia are foreigners.

MPI agreed that the tightening of property investment regulations in Singapore and Hong Kong will like draw more foreign buyers to Malaysian shores.

“Internally, Malaysia has also improved in the Doing Business 2013 report which would boost investors’ confidence in the country’s growth so this could help in attracting more foreign direct investment into the country and possibly translate into some property purchases,” MPI said.

MPI also said a large portion of foreign property owners in Malaysia are Singaporeans.

On whether this could somehow drive up prices in the housing industry, MPI said the industry in Malaysia was not a speculative market.

“Looking at our historical house price index, we can see that we have had steady appreciation in prices over the years with no peaks or troughs, unlike the more speculative markets of Singapore, Hong Kong or Shanghai which experience acute fluctuations during the recent economic crisis,” MPI said.

According to Smart Investors Club co-founder Jeffery Lam, Malaysia’s property industry is still one of the most affordable in the Southeast Asia region and that it still has a very huge potential to grow.

“Malaysia will definitely be one of the shining stars in the region and this is surely a good sign for the country’s economy,” he said. - The Malaysian Insider