PETALING JAYA: The national real estate landscape is witnessing a gradual resurgence of foreign interest, mainly in the Klang Valley and Sabah, Penang and Johor, according to an industry expert, with others citing the country’s affordability as a big pull factor.
Malaysian Institute of Estate Agents (MIEA) president Tan Kian Aun said the rebound is, however, less robust than in the pre-pandemic period, indicating a gradual recovery.
He said there are two categories of foreigners entering the local real estate scene – investors and expatriates, adding that factors influencing foreign property investments included the exchange rate, property tax and the recently imposed 4% stamp duty on foreign buyers.
Despite these considerations, Tan said Malaysia remains an attractive destination due to its affordability, reasonably priced properties and manageable stamp duty increases.
“The 4% increase in stamp duty doesn’t significantly affect cash buyers, who form a substantial portion of foreign investors, as loans for foreigners in Malaysia are challenging to obtain,” he said when contacted.
Despite challenges in job opportunities for foreigners, Tan noted that there is an increase in rental demand, emphasising Malaysia’s affordability and the attractive lifestyle it offers.
He also highlighted the Malaysia My Second Home (MM2H) visa holders’ potential to positively impact the property market, adding that many foreigners impressed by the Malaysian culture and lifestyle preferred to buy property here.
MM2H Consultants Association president Anthony Liew said a significant number of applicants from China, Hong Kong and Taiwan are choosing to invest in Malaysia.
Additionally, he said foreigners whose children study in Malaysia often opt to own property here.
“Japanese and Korean MM2H visa holders each make up half of the demography, deciding between property ownership or renting.
“On the other hand, individuals from European and American countries typically prefer renting in Malaysia,” he added.
Liew said Chinese families, especially those with children studying in Malaysia, tend to buy property. However, if they do not intend to continue residing in Malaysia, they may choose to sell their properties.
The MM2H, initiated in 2002 to attract retirees and long-term residents from abroad, was temporarily suspended in November 2019.
It was subsequently reintroduced in October 2021 with more rigorous application conditions.
Comparing expatriates working domestically with MM2H visa holders investing in Malaysia, Liew said the latter could significantly boost the real estate industry in the country.
From 2002 to 2018, the MM2H programme approved 21,841 applications, with participants investing a substantial RM5.5bil in Malaysian real estate.
Managing director of PPC International Sdn Bhd Datuk Siders Sittampalam, highlighted the interconnectedness of the property market with the economy but expressed caution in drawing direct links between expected economic growth and the property market’s immediate surge.
Despite acknowledging a 9% growth in property value in 2023, he emphasised a cautious outlook for 2024.
“We do not see a sudden surge in the market for 2024,” he added.
On the MM2H programme’s potential impact, he agreed that it could play a crucial role, especially for high-end properties.
He urged the government to expedite the programme’s implementation to stimulate the property market, particularly in the high-end segment.
Malaysia Productivity Corp director general Zahid Ismail said the increasing influx of expatriates in Malaysia signals the country’s attractiveness for investors and international companies seeking growth, highlighting the body’s vital role in driving productivity and innovation.
He said Malaysia’s conducive environment for foreign investment and innovation positions the country as a dynamic player in the global market.
