Investment Factor In Malaysia

Malaysia’s immense attraction as a tourist destination has encouraged large developers to create new resorts in many stunning locations. These, along with some city investments, are offering buyers the opportunity to employ potentially lucrative short, medium and long term investment strategies. Find out below some of the factors that make Malaysia such a promising real estate investment arena.

General Factors

Malaysia’s real estate market has been taking on new dimensions as a result of a major government initiative, the Ninth Plan, which calls for impressive new provisions for the country’s infrastructure. This, along with a growing economy and increased foreign investment, reinforces our analysts’ firm belief in the future success of Malaysia’s property market.

The government positively encourages foreign investment and has relaxed tax and home ownership rules for overseas purchasers. It also allows 100% freehold title within a relatively uncomplicated property purchase procedure.

Magnificent coastal and inland scenery, water sports, golf and many opportunities for sightseeing all make Malaysia a sought after holiday destination. These assets blend well with a vibrant culture and charming, English speaking people while a low cost of living and increased availability of budget flights to Malaysia further encourage a steady flow of homebuyers and tourists.

The amazing growth in Malaysia’s tourist industry is sustaining the real estate sector and has encouraged large developers to create new resorts in key locations. These offer plenty of potentially lucrative off-plan and buy-to-let investment options which are appealing to affluent expatriates from Asian, US and, increasingly, European markets. Chinese investors are particularly active in Malaysia and this trend is expected to grow.

Property purchasers in Malaysia are currently finding lucrative opportunities in coastal areas such as Ferringhi on Penang or Sabah which are proving to be highly popular amongst the most discerning of property buyers. City investment, particularly in the capital, Kuala Lumpur, is booming due to a wave of direct foreign investment from China, the US and the Middle East.

Economic Factors

Malaysia has one of the fastest growing economies in its region and a surge in economic activity (predicted increase in worker numbers to 27.9% by 2013 over a 10 year period) has brought with it a high demand for quality real estate. Successful buy-to-let investments are serving a growing expatriate community employed in and around the city.

Malaysia ranks among the top three Commonwealth countries for the greatest number of tourist arrivals, according to the World Tourism Organisation. Malaysia attracted 20.88 million foreign visitors in 2007, representing a 19% rise on the previous year and setting a new record of 14 billion dollars in revenue – an astonishing achievement for and all good news for today’s investors in tourist resorts seeking strong buy-to-let investment potential.

Real estate in Malaysia is high quality and very low cost, compared with many other locations. Due rate of exchange with the local currency, the ringgit (MYR), property is valued below the euro, dollar and pound sterling. Foreign investors buying into Malaysia are therefore finding their money goes a very long way, all the more so as property per square metre is selling at a fraction of the cost of similar properties in worldwide locations. The relatively low cost of living (eg. petrol is 40p per litre in 2008) is a firm attraction and low buying costs of between 1 and 2.5% of the property value are additional advantages for property investors in Malaysia.

Political Factors

Malaysia has an elected constitutional monarchy and a system of parliamentary democracy with an excellent record. It comprises 13 states as well as two local territories, the capital of Kuala Lumpur and Labuan, each with its own head of state and an elected assembly.

The Malaysian Parliament comprises the Senate (Dewan Negara) and the House of Representatives (Dewan Rakyat). The Senators serve a six-year term, while members of the House of Representatives are elected for a five-year term. Since gaining its independence from Britain on 31 August 1957, Malaysia has held elections every five years or less. The tenth general election was held on 29 November 1999.

Malaysia has experienced little political violence since ethnic rioting in 1969. In late April 2003, Malaysia’s Official Human Rights Commission – Suhakam – called for the Internal Security Act to be replaced with laws modeled on Western anti-terrorism legislation.

Today, Malaysia is a prominent member of the Association of Southeast Asian Nations (ASEAN) and is a politically stable country. This makes it an attractive location for foreign investors and benefits the country’s economic growth. Recent government policies have included a relief fund and tax breaks for the tourism sector, liberalisation of foreign investment regulations, and new funds to help traders.

In fact Malaysia is amongst Asia’s leaders in terms of attracting interest from foreign investors, most of whom are from the Middle East. They see it as a viable and attractive emerging market with high medium term growth potential, within an economy that recorded a GDP expansion in the third quarter of 2007 of 6.3%. Analysts believe the current political and economic situation will positively and directly affect the real estate market in Malaysia.

Natural Factors

Close proximity to Australia, Bali and Singapore attracts increasing numbers of tourists from these countries as well as significant amounts of direct foreign investment from China, Japan and the United States.

Malaysia is well served by budget UK flights with some prices starting at only £285. In addition, Malaysia is connected by low cost regional flights by Air Asia from major S.E. Asian cities, creating easy access for a growing influx of visitors.

English is widely spoken, making a property investment in Malaysia a transparent procedure while all property sale agreements are written clearly in English. In addition, English language newspapers, radio and television are available everywhere, making a move here almost like home from home.

A wonderful climate awaits holiday makers, re-settlers and investors alike. The country is generally warm throughout the year with temperatures ranging from 21° to 32°C in the lowlands that are ideal for the average holiday maker seeking a warm and sunny climate.

In addition to the climate, many visitors come to Malaysia to enjoy its exotic culture and a rich culinary experience including satay, noodles, nasi lemak, rendand and roti canal, all of which are spicy and full of aromatic flavour. A warm, friendly population, a peaceful society and a pro-British environment make for a highly attractive destination. Superb golf and other sports facilities add to Malaysia’s appeal and, while the country is renowned for its beautiful landscapes, it is fast emerging as South-East Asia’s premier golfing destination with some 200 quality golf courses on offer. Many of these courses are designed to top international standards and are equipped with all modern amenities along with corresponding resort developments.

Malaysia is also a famous angling location and some of the country’s rivers and seas hold prime game fish, including marlin, sailfish, tuna, barracuda, amberjack and dorado. Inland, fishermen hunt for the prized red mahseer or ‘kelah’, a powerful freshwater fish to be found in clear water, fast-flowing rivers such as those in Endau-Rompin Park. World class diving exploring rich coral beds and beautiful aquatic life provide some memorable diving opportunities.

Logistical Factors

Malaysia is easy and cheap to reach with 25 flights arriving per week from the UK, starting at only £285. Malaysia is also well served by low cost regional flights on Air Asia to major S.E. Asian cities.

Most visitors arrive in Malaysia by air via the main gateway at Kuala Lumpur International Airport (KLIA) at Sepang in the state of Selangor. The rest of the country, including Sabah, Sarawak and the Federal Territory of Labuan in East Malaysia, is well served by 14 domestic airports and airstrips.

Air services in Malaysia are on the increase, in line with demand to accommodate a growing number of visitors. Kuala Lumpur-based Air Asia has committed to increasing its fleet by another fifty 180-seat Airbus A320 jets and has also launched a new long-haul, low-cost airline – Air Asia X. A revised cost structure has enabled the airline to charge fares as low as 39 ringgit from Kuala Lumpur to Penang compared to 40 ringgit for the bus trip. A car journey over the same distance will set you back double at 80 ringgit, including tolls and petrol.

Malaysia’s major airports are located at: the new Kuala Lumpur International Airport (KUL), Kuala Lumpur-Subang (SZB), Penang, Johor Bahru, Kota Kinabalu, Kuching and Langkawi.

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