Malaysian properties call

Foreign investments and dynamic urbanisation will drive market

With new property cooling measures introduced in Singapore and China, experts say real estate investors in these two places may be looking beyond their borders to find good buys.

Faced with new limitations on loans and options for affordable properties, property investors in these countries are shifting their sights to other parts of Asia and the United Kingdom, observers said.

Mr Tim Murphy, the managing director of property investment firm IP Global, said Malaysia might offer the best option for property buyers, citing the country’s steady market, better yields, sensible tax system and ease of access to loans.

“There’s still medium-term capital growth without the scariness of a boom-bust mentality because Malaysia regulates its property sales quite carefully, so it doesn’t allow you to flip,” he said.

The strong performance of the Malaysian property market in the second half of this year is expected to continue throughout next year and 2012, Mr Murphy said.

Strong foreign investments and dynamic urbanisation will drive the Malaysian property market, while rental rates will also be supported by the growing number of the “aspirational young” – those under 35 years old who dream of buying their own homes, he added.

While Malaysia is not likely to rival Singapore, Hong Kong and the main cities in China in the long term, it would a credible alternative and a notch higher than the Philippines and Thailand, he said. Buyers can expect a yield of between 5 and 6.5 per cent for residential property and a range of 7 to 10 per cent for commercial properties, he noted. Mr Murphy suggested that they should opt for apartments instead of houses in areas such as Kuala Lumpur, Bukit Ceylon and Mont Kiara, preferably those that are near transport and schools.

IP Global, which has US$800 million ($1.07 billion) of assets under management, has achieved double-digit return on capital for its properties in Malaysia. It has about 500 properties in Kuala Lumpur with 96 per cent occupancy. The firm is set to increase its investments in the country for the next three months, both in the residential and commercial space, it said.

Source : Today – 10 Sep 2010

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