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Malaysia - Property Prices
Kuala Lumpur is the most expensive area to purchase property within Malaysia and prices here can vary widely depending on the type of property. The average house price is currently stated as being RM 500,000 ($165,000). Apartments are the favourite choice of purchase and anything up to RM 10,000,000 ($305,000) but will get you a penthouse apartment with a panoramic view of the city and facilities that are on your doorstep. In the rural districts prices are clearly lower yet you’re still getting a bargain. In a more rural area a house can be purchased for around $23,000.
Regional Difference in Prices
As explained above, Kuala Lumpur is the most expensive place to purchase property, so naturally, it goes without saying elsewhere will be cheaper. The rural areas are much cheaper and in turn, this results in the chance for foreign investors to purchase more than one property. This is because foreign investors are only allowed to purchase property over RM 500,000. This is law in Malaysia and is due to leaving cheaper property to its native people. Districts around an hour outside Kuala Lumpur can be acquired for around RM 120,000. These districts are popular for city people who like to escape at the weekends.
Market trends are variable and lending criteria is now stricter in Malaysia. While the market is moving, it has slowed down. In the last quarter of 2012, the market showed a downturn in movement and this was reported as the lowest move since the same quarter in 2010. The market is expected to have slowed down more in 2013. Kuala Lumpur is still moving the fastest with Penang up and coming; while there is little to be worried about, it’s still one to keep an eye on. Malaysia has the lowest house prices since the pre-Asia crisis and Kuala Lumpur suffered a fall in prices shortly after this.
The slow-down in the housing market is due to the stricter lending criteria now in place. While Malaysia is very prosperous, lending has slowed down preceding the downturn in the housing market. Approval rates are down in 2012 to lower than 50% compared to over 62% in 2008.
Is Buying Still a Good Investment?
It is safe, however, to note that investing in Malaysia is still an attractive prospect and property is still very cheap in comparison to other Asian countries. If it’s a struggle to raise finance within Malaysia, then there is nothing to prevent raising finance outside the country and bringing your finance into the country. This is quite the perk with Malaysia and one option which is used widely by western investors or neighbouring Asian investors. Malaysia still remains very liberal on bringing money into the country with little or almost no tax penalties.
Property purchasing is a highly attractive investment in Malaysia due to the economy’s emerging growth within Asia. In terms of investment, there is little to be concerned about and with the rental market still high and continuing to grow, there is still good reason to consider investment in property.
Do Locals Try to Charge expats More?
It has been noted that middle-class, young, Malaysian property buyers are reporting that they’re unable to buy property as foreigners have snapped up bargains. With the current threshold at RM 500,000 for foreigners being able to purchase property, then the government threw out raising the bar to RM100,000,000. With developments popping up throughout the country and the government appealing to foreign investors, Malaysia’s own people were seeing a shortage of properties to purchase. These rules are yet to be implemented, but there’s a strong possibility this may happen as communities such as Iskandar Island which is larger than the island of Singapore, is attracting massive interest from foreign investors. It’s safe at the time of writing to say that expats may well have to spend a little more cash on buying property.
Despite all of this, with property much cheaper than elsewhere and a high standard of living, Malaysia is still a great choice for foreign investors.