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Foreign buyers making their way to our shores

INVESTORS in overheated markets may be arriving.

Those in Singapore and in China – which have introduced fresh rounds of property cooling measures such as limitations on loans and options for affordable properties – are eyeing good buys in other parts of Asia and the United Kingdom, industry specialists observed.

Hong Kong-based property investment firm IP Global Ltd – which has US$800 million (RM2.48 billion) of assets under management – said Malaysia might offer “the best option” for buyers thanks to its steady market, better yields, sensible tax system and easy access to loans.

The firm disclosed it has achieved double-digit returns on capital for its properties here.

Currently, it has about 500 properties in Kuala Lumpur enjoying 96 per cent occupancy and is poised to increase its investments in residential and commercial space in the next three months.

“There’s still medium-term capital growth without the scariness of a boom-bust mentality because the country regulates its property sales quite carefully,” said managing director Tim Murphy, envisaging the market’s robust performance in the second half of 2010 to continue through 2012.

Strong foreign investments and dynamic urbanisation will drive the Malaysian market while its growing number of the “aspirational young” – the under-35 who dream of buying their own home – will support rental rates, Murphy elaborated.

However, he thinks Malaysia is unlikely to rival Singapore, Hong Kong and China’s main cities in the long term although it will be a credible alternative and a notch higher than the Philippines and Thailand.

“Buyers can expect a yield of between five and 6.5 per cent for residential properties and a range of seven to 10 per cent for commercial,” he noted, recommending investment in apartments near transport facilities and schools instead of houses in areas such as KL, Bukit Ceylon and Mont’ Kiara.

Earlier in June, online property research house Global Property Guide singled out Malaysia as its preferred property investment destination in Asia, citing real estate is overvalued in most countries in the region except ours.

Malaysia’s other plus points, it noted, include macroeconomic stability, consistently strong gross domestic product growth, low debt, sound banking system, and international reserves at a healthy nine months of retained imports.

Source : New Straits Times Property
Date Published : 04 October 2010

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