KUALA LUMPUR; The demand for luxury properties in Malaysia is on the rise, driven by wealth growth, foreign investment, and favourable market conditions.
The appeal of luxury properties in Malaysia is bolstered by the lifestyle, safety, and amenities they offer, including proximity to international schools, healthcare facilities, and shopping districts, according to market analysts.
"There is an increasing number of high-net-worth individuals in Malaysia and across Southeast Asia, leading to greater demand for luxury properties," noted one market observer.
"Foreign investors, particularly from China, Europe, Singapore, and the Middle East, are drawn to Malaysia's luxury properties, especially in urban areas like Kuala Lumpur, Penang, and Sabah."
The observer also pointed out that Malaysia offers competitive prices compared to other luxury markets in Asia, along with a favourable property ownership framework for foreigners, making it an attractive destination.
"Cities like Kuala Lumpur have experienced significant urban development, with new high-end residential projects, luxury condominiums, and mixed-use developments being launched," he said.
"Malaysia remains one of the most affordable countries in Asia for property prices. Coupled with its advanced infrastructure and location free from natural disasters, many foreigners are choosing to make Malaysia their second home," he added.
Previn Singhe, chief executive officer (CEO) of Zerin Properties, reported a notable increase in foreign high-net-worth individuals purchasing luxury properties valued above RM4 million, with an estimated 20 per cent rise in transactions in the first half of 2024 compared to the second half of 2023.
He attributed this trend to Malaysia's stable government and robust economic activity, which are attracting buyers, particularly from China and the United Kingdom, who wish to live with their families in Malaysia's multicultural society.
Previn also said that Chinese and British buyers constitute the largest segment of foreign purchasers of luxury properties handled by his firm, which primarily caters to high-net-worth individuals.
He added that there is also a growing interest from wealthy individuals from India, who are relocating their businesses to Malaysia and seeking high-end homes.
These Indian buyers typically look for luxury condominiums and landed houses with over 4,000 sq ft of built-up space, priced above RM4 million, he said.
Biggest foreign property buyers from China
Malaysia has risen to become the second most popular destination in Southeast Asia for Chinese real estate buyers, moving up from third place in 2022 (Thailand being first), according to a report by Juwai IQI in early 2024.
Despite a trend of Chinese citizens selling off their overseas properties due to higher mortgage payments driven by rising global interest rates and a slowdown in China's economy, many are still keen on purchasing property in Malaysia as they are finding it more convenient to buy a home here.
Juwai IQI reported a steady stream of enquiries from potential foreign buyers each month.
In the first quarter of 2024, enquiries from Chinese buyers alone surged by 42 per cent compared to the previous quarter, according to CEO Kashif Ansari.
He noted that Chinese buyers represent the largest segment of foreign purchasers in Malaysia, primarily seeking either landed properties or high-rise apartments in Kuala Lumpur and Johor, with budgets up to RM2 million.
Malaysia is also witnessing a growing interest from Chinese nationals in multimillion-ringgit luxury homes as part of the Malaysia My Second Home (MM2H) programme. This government-promoted initiative allows foreigners to reside in Malaysia on a multiple-entry social visit pass, provided they meet certain criteria.
A revamp of the MM2H residency visa scheme in June 2024 has made it mandatory for foreign residents to purchase property in Malaysia.
The number of Chinese nationals residing in Malaysia has been increasing, driven by the rising number of Chinese students and professionals in the country.
According to the Ministry of Education, Malaysia's higher education institutions enrolled 44,043 Chinese students in 2023, a 35 per cent increase from 2021.
Additionally, the number of Chinese executives and employees working at Chinese companies in Malaysia has grown from 10,000 in 2021 to around 45,000 currently.