Malaysia is a great place to invest in property, in fact, it’s also a place where you could actually consider residing long term.
Most people know that KL is the capital and where things “happen”, while Penang is the place where foreign retirees flock in masses.
But I think it would be great to invite a local expert, so he can give his thoughts on the most promising areas in Malaysia.
Therefore, I contacted U Kian Chong.
He’s the CEO of Avid Estates, a boutique real estate agency in Malaysia with a team of almost 30 people, which is focused on high-end properties in Kuala Lumpur.
Let’s see what he has to say.
U Kian, you’re an engineer like myself who decided to engage in the real estate business instead. Can you tell us more about yourself and your current business?
Although I obtained a first class honours degree in Chemical Engineering from the UK, I worked as a commercial engineer upon my graduation and spent about 8 years in the Oil & Gas construction industry in Malaysia.
I was really exposed to the estate agency business by accident and was coaxed by a friend to join. However, due to my love for architecture and interior design, and my natural interest in property investment, it was an easy decision to make.
This was 13 years ago now and I’m still as passionate about real estate and the agency business as I was on Day 1.
How has the Malaysian property market performed recently? Is now the right time to buy, or should people wait?
The property market has been weak over the past two years due to a combination of factors:
- The difficult economic situation and political uncertainties in Malaysia
- Tightening of bank lending guidelines
- Oversupply of residential properties, particularly in the high-end sector
It is certainly a buyer’s market now because property prices have been softening and there are interesting investment opportunities to be found.
What’s your view on Malaysia’s property market the coming 5 years?
I feel the market will remain flat over the next year. Conditions will continue to be challenging. The general expectation is for the market to recover right after the elections when usually sentiments will improve but I’m more cautious for 2018.
Having said that, properties in Malaysia compared to those in neighbouring countries are still very affordable and of a high quality – so they offer good value.
Bank financing is still widely available and lending guidelines are still lenient in comparison. Malaysia is generally pro-foreign investment and the laws and processes related to property investment is relatively straightforward.
I believe Malaysian properties will continue to attract interest and I’m optimistic that the market will improve over the coming years.
As far as I know, the most popular cities in Malaysia are Kuala Lumpur, George Town (Penang), Johor Bahru and a newcomer: Ipoh. Are there any other cities that should be of interest for property investors?
We know of some investors who have looked at Malacca but being a small agency in Kuala Lumpur, we are very much focused here in the capital.
Johor Bahru is on the rise and some analysts predict that it will become the new Shenzhen (which went from being a fishing village to become one of Asia’s major business hub within a time period of 3 decades). What are the benefits and drawbacks of investing in Johor Bahru compared to Kuala Lumpur? Would you recommend foreigners to invest in Johor Bahru?
Johor, specifically Iskandar Malaysia, has huge potential due to:
- Its strategic location in Southeast Asia, along the busiest sea trade routes in the world
- Its proximity to Singapore and comprehensive master-planning
- Strong support from various stakeholders including the federal and local governments and the business community, who are committed to the economic development of the whole region.
The cumulative value of committed foreign and local investments have reached MYR 244 billion, a good reflection of corporate investor confidence.
However, retail investors looking at Johor should possess a much longer term view. Immediate focus should also be on industrial properties where demand is higher now.
Is it common that foreign private investors buy land in Malaysia? What land types and which areas would you recommend to a foreign investor who wants to buy land?
It is not common unless such investors are looking to develop the land for future resale or are looking to build a residence for their own occupation.
Again it would depend on their investment appetite and timeframe, but I would most likely recommend residential land in more established neighbourhoods in KL.
Let’s say that I have USD 200.000 to spend on a property in KL and my main goal is to get a decent price appreciation, at the same time as I earn money on rental incomes. What property type and which areas would you recommend in KL?
Generally, condominiums/apartments will generate a better rental yield compared to landed properties.
In the current market, there are opportunities to secure units at below market value and this ensures the best chance of capital appreciation.
As our focus is on the high-end market, we would recommend KLCC and the western suburbs of KL such as Bangsar and Mont’ Kiara where there is also a large expat community.
Thanks U Kian. Finally, is there anything you want to tell our readers?
As in any property market, it would be best for first time investors to tap on the knowledge and experience of a reliable and trustworthy estate agency. Even in a small city like Kuala Lumpur, the process of looking for a good property investment can be overwhelming.
Avid Estates welcome interested investors to browse our website at www.avidestates.my for more information, or to reach out to any of our friendly real estate professionals.
We will be always be more than happy to share our knowledge and to help make your property search a less daunting experience.