A 3 Year High for Malaysia Tourism & Economy
The residential property market in Malaysia was only opened up to overseas investment at the end of 2006, yet it is already attracting high levels of interest from shrewd speculators. With tourism and economic growth at a three year high - both backed by positive government initiatives to encourage foreign investments - it's easy to see why.
Furthermore, the widespread use of English, combined with the same systems of law, property ownership, and corporate governance as other Commonwealth states, simplifies the process for all concerned, making Malaysia an ideal investment opportunity.
Malaysia My Second Home
A significant initiative for overseas investors is the movement 'Malaysia My Second Home' (MM2H). This campaign, aimed at foreign retirees, has so far attracted almost 10,000 participants from the UK, Japan and China, among others.
This not only boosts the Malaysian real estate industry directly, with increased demand for second homes and retirement properties, but also has a secondary effect through increased numbers of friends and relatives who visit the country.
Growth in Tourism
According to the World Travel and Tourism Council (WTTC), Malaysia's tourist industry is expected to contribute 4.4% to gross domestic product (GDP) in 2007, equating to US$7.6 billion. Forecasts for 2017 estimate the sector will account for 5.1% of total GDP, equivalent to US$19.3 billion.
The number of low cost airlines operating out of Kuala Lumpur is increasing, which will further boost the industry. Air Asia X is looking at other destinations to service from Kuala Lumpur with London Stansted, Manchester, Prague and Moscow key destinations in Europe.
By the end of 2008, non-stop flights should be operational between London and Kuala Lumpur. Such a vibrant and expanding tourist sector can only be good news for overseas investors. The World Tourism Organisation already puts the country in the top three of the fifty-three Commonwealth countries for tourism.
A Growing Economy
Malaysia's growing economy offers great stability for the overseas investor with low inflation, low unemployment, and exports with reserves both strong and strengthening. GDP growth was 5.9% in 2006, and according to the Department of Statistics of Malaysia, GDP growth was 6% for the first 3 quarters of 2007. Continued economic growth will be driven by a young, educated population. This creates very favourable conditions for the property market as wages and confidence rise.
Foreign direct investments account for about one-third of total private investment in Malaysia. Last year, US$9.4 billion worth of foreign investments came into the country recording a massive 54.4% increase on 2006 FDI figures of US$6.1 billion. Gross FDI for the past decade has remained steady at a level of US$4.7 billion to US$5.3 billion each year, reflecting the reassuringly stable economic conditions for foreign investors (Source: Department of Statistics Malaysia).
Investment in Malaysia Real Estate
Investment into Malaysia's real estate sector has increased substantially from £1.6 billion (Dhl1 billion) in 2000, to £23.7 billion (Dhl65 billion), and is forecast to rise to £26.4 billion (Dhl84 billion) by 2010. This will mean Malaysia's real estate investment will contribute 35% per year to the Emirate's GDP over the next 5 years, according to the Department of Tourism and Commerce Marketing, Government of Malaysia.
Buying Property in Malaysia
Investors targeting the tourist industry in Malaysia will find favourable circumstances both in short-term rental and sales of second homes. Opportunities are mainly concentrated in the North Western island resorts, particularly the areas in and around Port Dickson, where strong short-term rental rates provide impressive returns.
Malaysia is growing in significance as a centre for world trade, with low business costs encouraging multinational companies to invest. Global financial services company, UBS, named Malaysia their 'best bargain' for business travellers, with overall costs, including travel and entertainment, running at less than a quarter of those in Tokyo and other major cities. This puts the executive property market in a very strong position, with rental yields in Kuala Lumpur standing at around 7.4% to 8.7%, and new off-plan properties promising guaranteed yields of up to 10%.
A large expatriate population, combined with a young, well paid, urbanising Malaysian workforce, is fuelling demand in the capital, pushing up rents to the level of other major international business centres.
Malaysia a "Buy to Let" Market
With the growing tourism industry in Malaysia and low costs direct flights from the UK and other European countries, Malaysia provides interesting buy to let investment opportunities.
Malaysia Weblog
