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Malaysia is becoming the go-to destination for Chinese overseas home buyers

Malaysia is ticking all the right boxes for Chinese real estate buyers who have reacted to uncertainty and risk by investing in markets that are closer, require less capital, and offer better yields.

To help Chinese buyers understand Malaysia’s real estate sector, Juwai.com has published a report: MALAYSIA: A CROSS-BORDER BUYER’S GUIDE in both English and Chinese

Here are some key highlights of this report:

Chinese demand for Malaysian real estate

Malaysia was the sixth most-popular country for Chinese buyers in 2018 and 2019. Mainland Chinese buyers accounted for MYR 8.4 billion (USD 2 billion) of total Malaysia residential property sales, about 12.1 per cent of the total by value, in 2018. Approximately MYR 4.3 billion (USD 1 billion) of new residential building construction in Malaysia takes place due to Chinese buyer demand.

Current state of Malaysia’s property sector

 Malaysia’s real estate market has been recovering since the third quarter of 2018 from more than two years of price correction. Investor confidence seems to have been restored, and transaction volume has risen. Home prices have bottomed out. The national average home prices rose 0.9 per cent YoY (year on year) in the second quarter of 2019. And the transaction volume and value grew 6.1 per cent and 9.5 per cent from a year ago, respectively, in the first half of 2019.

Malaysia: An Ideal Place to Live and Invest

Malaysia is one of the most important economies in Southeast Asia. Though its economy is smaller than those of Indonesia and Thailand, its GDP per capita¹ ranks close behind Singapore and Brunei, making it one of the wealthiest countries in the region.

With a stable political and economic environment, Malaysia boasts excellent infrastructure, convenient transportation, and a low cost of living.

Malaysia is also a multicultural society which embraces both Asian and Western lifestyles. With its pristine beaches, tropical rainforest, colonial architecture, and cosmopolitan capital, there is so much to do and see. Thanks to a warm climate, the temperature is moderate throughout the year. All these make Malaysia an ideal retirement destination and Forbes has listed the country as one of the world's 10 best countries to retire in.²

Factors drawing foreign buyers

For foreign property buyers, Malaysia offers several advantages.

1. Home prices are not high and down, payments are low

2. It’s relatively easy to apply for a loan

3. Sophisticated leasing market

4. Freehold ownership

5. The government has also lowered the threshold for overseas property buyers from MYR 1 million (equivalent to RMB 1.69 million) to MYR 600,000 (equivalent to RMB 1.01 million). However, this policy will expire at the end of 2020.

6. Malaysia has a residency-by-investment programme. The Malaysia My Second Home Programme offers non-Malaysians benefits including a 10-year renewable visa.

A good time to buy in Malaysia

The report also highlights Juwai IQI’s survey of the Malaysian real estate industry conducted in November 2019. According to the survey:

• For 2020 and 2021, the outlook is bullish.

• The number of sales taking place will increase.

• Residential prices are to increase by five per cent in the next 12 months and nearly 15 per cent in the next two years.

• Residential rents are on a similar trajectory and expected to rise five per cent this year and more than 10 per cent next year. 

Why is this report essential for real estate professionals?

While this report serves as a buying guide for foreign buyers, it also provides insights into Chinese consumer behaviour. Having a greater understanding of Chinese buying habits from the very start will enable developers and agents to create a sound business strategy to not only better engage with Chinese customers but will also help to establish and grow your brand in the China market.

For professionals in the real estate industry or industry-related sectors, this report also provides a comprehensive overview of the Malaysian property sector which they will find invaluable.

Source: International Monetary Fund, World Economic Outlook Database, October 2019; Forbes: The Best Places To Retire Abroad In 2020

Like this report? Sign in now to download the MALAYSIA: A CROSS-BORDER BUYER’S GUIDE and read why Malaysia is favoured by Chinese property buyers.

Juwai.com has a wealth of information about dealing with Chinese buyers, including …

1. 6 quick tips on how to engage Chinese property buyers

2. How feng shui can help close a deal.

3. How Chinese travel can impact on where they choose to buy their overseas property

4. Which are the top 10 global picks for Chinese buyers when it comes to buying a property