Malaysia can expect to see an increase in foreign purchases in the next 12 months, says Juwai IQI.
Sales would be driven by the lower threshold on high-rise property prices to RM600,000 from RM1 million previously for foreign ownership as proposed in Budget 2020, the firm said.
The properties include high-rise stratified units in George Town (Penang), Kuala Lumpur, Johor Bahru and some cities in Selangor and they could attract a fair number of foreigners who may see it as an investment opportunity.
Juwai IQI group executive director Kashif Ansari said it expects the market will remain resilient for 2020.
"The current economic climate and historical data speak for a rebound in Malaysia’s real estate market throughout 2020. We believe that the overhang will be well-managed throughout the year and will most likely see an upward trajectory trend," he said.
Kashif also said Malaysia would continue to be on the global investors’ radar due to its political, economic and infrastructure stability that bolstered the outlook of the ringgit.
The ringgit remained structurally stable and was expected to move around 3.97 to 4.30 against the greenback in 2020.
"Vision 2020 has been talked about over the last few decades. Though the goal post has been moved to 2030, it’s undeniable that Malaysia has come a long way since the 1990s, and with Budget 2020’s focus on digital transformation, it looks like we’ll go even further," he said.
Juwai IQI executive chairman Georg Chmiel believes that Malaysia’s residential properties will continue to be attractive to foreign buyers.
"In the first half of 2019, Malaysia was the fifth most popular country for Chinese property buying inquiries in the world and we predict this trend to continue in 2020. Many Chinese property buyers are willing to spend USD283,000 to USD424,000 for an overseas home. Diversification of investment portfolios and the spreading of wealth seem to be their main motivation. Other factors include education and better living conditions. The interest is strong with the lower threshold, we are definitely going to see more traction,” he said.
With Chinese New Year around the corner, Chmiel expects many celebrants will be looking to buy real estate and upgrade their investment holdings.
It is estimated that Chinese buyers account for RM8.4 billion (US$2 billion) of property sales, which is 12.1 per cent of total transaction value and 0.4 per cent of the total transaction share.
“With the lower threshold for foreigners to purchase property in effect this year, we foresee a strong increase in demand for property from foreign buyers. In fact, our recent survey, conducted between six and 21 November 2019, which polled over 300 real estate agents, the industry is reporting strong growth upcoming in transactions, prices, and rents," said Chmiel.
Chmiel said, the findings also revealed that 80 per cent of respondents nation-wide are expecting foreign buyers to buy more property in the next 12 months than in the last 12 months.
The states where the largest share of respondents believe foreign buyer transactions will grow in number are Ipoh (87 per cent), Kuala Lumpur/Selangor (86 per cent), and Sarawak (85 per cent).
The states where the largest share of respondents believe the foreign-buyer transactions will fall in number are Melaka (26 per cent) and Kuantan (25 per cent).
Malaysia My Second Home Scheme a key attraction
Kashif said Malaysia has opened its doors to many foreigners who refer to it as their second home.
"The introduction of Malaysia My Second Home Scheme (MM2H) has positioned the country as one of the most foreign-friendly countries in Southeast Asia for real estate investors," he said.
According to the Ministry of Tourism Arts and Culture, a total of 9,439 applications were received from July 2018 to November 20th last year. Out of which, 4,487 applications have been approved.
Since the launch of MM2H in 2002 till November 2018, the initiative has drawn 43,466 applications. Applications received were from 131 countries, mainly from Chinese citizens. China dominated the list with 13,892 approvals over the period, followed by Japan (4,882), Bangladesh (4,187), the United Kingdom (2,729) and Korea (2,568).