Property Market Overview

Thanks to government initiatives such as the “Malaysian Second Home Programme,” Malaysia’s real estate market is becoming an attractive target for international investors. Property is reasonably priced in both tourism and residential sectors, while the economy is stable and prospering.

It is said that real estate and the tourism industry go hand and hand, and Malaysia is a fine example of this theory. Malaysia is increasingly popular as a tourist destination, especially with the government's ongoing campaign during Visit Malaysia Year 2007. Its secondary home market is taking off, as investors look to purchase resort property for both personal use and to profit from the rental market. In addition to Kuala Lumpur, most real estate investment in this regard is taking place in the island resorts in the north west of Malaysia, including Penang and Langkawi, as well as Johor Baru.

A large population of expatriates is pushing up demand for condominiums and serviced apartments. Real estate agents say rental rates chargeable in Kuala Lumpur are comparable with other major cities worldwide. New off the plan properties in Kuala Lumpur are being sold to international property developers with guaranteed rental yields of between six and ten per cent.

In particular, Malaysia’s high-end real estate sector is taking off and is expected to continue flourishing due to the government in December 2006 easing rules on foreign ownership of residential properties.

Second Finance Minister Tan Sri Nor Mohamed Yakcop was quoted as saying that the government is implementing the new policy in line with the "Malaysia: My Second Home" programme. The programme allows people from all over the world who fulfil certain criteria to stay in the country as long as possible on a social visit pass with a multiple entry visa. The Social Visit Pass is initially for a period of ten years depending on the validity of the applicants passport and is renewable.

The programme is open to all citizens of countries recognized by Malaysia regardless of race, religion, gender or age. Applicants are allowed to bring along their spouse and children (provided they are below 18 years of age and unmarried).

The rule allowing foreigners purchase residential properties valued above RM250,000 a unit without the Foreign Investment Committee's (FIC) approval took effect December 21, 2006. In addition, there is no longer a limit to the number of residential properties that foreigners can own or any conditions upon their usage.

Apart from the requirement to get FIC approval for purchases above RM250,000, foreigners were previously only allowed to buy properties for their own use. They could not hold these for investment purposes. Foreigners have been allowed to buy condominiums in Malaysia for quite some time, but were not until recently allowed to buy land for rental purposes. Since April 2001 they have been able to buy residential units and other properties costing MYR250,000 (US,194) and above.

The Malaysian government has also laid out a US5 billion blueprint to turn the area around its second-largest city, Johor Baru, into a prosperous Asian metropolis has attracted a pair bit of attention from foreign investors. Prime Minister Abdullah Ahmad Badawi said the government would set up a central planning body to oversee 20 years worth of projects to transform Johor Baru and its surrounds.

The 2,200-square kilometre development area is to boast a high-tech park, logistics and industrial precincts, educational park, regional hospitals, marina, waterside villas, theme parks and luxury residential communities. The government will also create free access zones in certain areas in Johor where visitors from Singapore can live and work. There will be no immigration and customs check for entry into these zones, which will be guarded by surveillance systems and barriers. Abdullah said investment of billion would be needed in the first five years from 2006-2010 to build roads, rail and other infrastructure required to set the stage for an influx of private investment.

Essential information

Location
Malaysia is divided into two areas: East and West. West Malaysia is also referred to as Peninsular Malaysia. The two areas are separated by the South China Sea. Peninsular Malaysia shares a border with Thailand to the north. Singapore sits off the southern coastal tip. East Malaysia shares Borneo with Brunei on the northern coast and with the Kalimantan region of Indonesia to the south.

Area
329,758 square kilometres.

Population
24,385,858, (UN, 2006)

Language
Malay, Chinese ethnic and regional dialects. English is widely spoken in the major cities and tourist centres.

Religion
Malaysia’s official religion is Muslim, however there is a large population of Chinese Buddhists and Hindus.

Currency/Money
Malaysia’s currency is the ringgit. Major credit cards are widely accepted. Traveller's cheques are accepted at banks, large hotels, and shops.

Climate
Malaysia’s climate is hot and humid, however cooler temperatures can be found in the highlands. Average daily temperatures vary from about 20° to 30°C.

International dialling code
+60

Capital
Kuala Lumpur

Electricity
240 volts

History

According to historians, present day Malaysia has been occupied by humans for as long as 40,000 years. In about 1400 AD, a Sumatran prince who converted to Islam founded the kingdom of Malacca. Due to a prosperous economy, Malacca expanded into most of the Malay Archipelago, but in 1511 was conquered by the Portuguese. In 1641, however, Malacca fell to the Dutch.

From the late 18th to the early 19th century, Britain worked its influence and slowly gained control of Peninsular Malaysia. At the same time, the largely Malay population was expanding as ethnic Chinese and Indians came to work in Malaysia’s tin and rubber industries.

The British impact on West Malaysia was immense. Britain played a large role in the establishment of the plantation system and the commercialization of agriculture; the present-day transportation system and modern political institutions.

Malaya, Sarawak, and North Borneo were seized by the Japanese in 1941 and 1942 and remained under Japanese occupation until World War II ended in 1945. Ethnic rivalries burned throughout the country between the Malays, Chinese and Indians throughout the 1940s. As independence inched closer, ethnic Malays feared immigrants would acquire political power. In 1946 they protested successfully against a scheme, known as the Malayan Union, that would have given most immigrants citizenship and voting rights while reducing the power of the Malay rulers. In 1948 the peninsular states formed the Federation of Malaya, which retained the power of the sultans.

The Alliance was the dominant political party that emerged in the 1950s. It was multiethnic in its leadership and swept the first nationwide elections in 1955. The British and the Alliance hammered out a constitution. In 1957 the Federation of Malaya (which occupied what is now West Malaysia) gained independence from Britain.

Malaya’s first prime minister was Tunku Abdul Rahman. He proposed that Malaya, Singapore, Sarawak, North Borneo and Brunei join to become a Malaysia federation. With the exception of Brunei, the others joined the federation in 1963. (Singapore exited in 1965.)

Government

Malaysia is a federal constitutional monarchy. The government is based on the 1957 constitution of the Federation of Malaya, which was an independent nation from 1957 to 1963 that occupied present-day West Malaysia. The Federation of Malaya joined Sarawak, Singapore and Sabah to form the Federation of Malaysia in 1963. (Singapore became an independent republic in 1965.)

The Prime Minister of Malaysia is the indirectly elected head of government and is formally appointed by the King of Malaysia. He is traditionally the leader of the largest party in the federal elected lower house of Parliament, the House of Representatives, the elected lower house of Parliament. Since independence in 1957 the prime minister has been from the United Malays National Organisation (UM, NO), the largest component party of the Barisan Nasional or National Front (known as Perikatan or Alliance until the 1969 general election). The current and Prime Minister of Malaysia is Dato' Seri Abdullah Ahmad Badawi.

Economy

Initially, like many other South East Asian countries, Malaysia’s economy was based on the production and export of raw materials, including petroleum, natural rubber, tin, wood.

From the mid-1970s to 1990s, Malaysia wasn’t just one of Asia’s so-called “tiger” economies. With Japanese support, it was considered one of the world’s fastest growing economies, due to its burgeoning manufacturing sector.

But Malaysia’s growth came to a grounding halt when the Asian Financial Crisis hit in 1997.As with other countries affected by the crisis, there was speculative short-selling of the Malaysian the ringgit, foreign direct investment plumetted and capital flowed out of the country. Malaysia refused economic aid packages from the International Monetary Fund (IMF) and the World Bank, however.

Malaysia’s comeback followed massive government spending and budget deficits in the years. Later, Malaysia enjoyed faster economic recovery compared to its neighbours.
Today, Malaysia’s urban centres, namely capital Kuala Lumpur, are modern centres utilizing the latest technology. Its economy continues to expand as it pushes to keep ahead of the pack in today’s digial age. One of the government’s main goals is to position Malaysia as a hub for high-technology businesses in Southeast Asia.

Visas

Every person entering Malaysia must possess a valid national Passport or internationally recognized Travel Document valid for travel to Malaysia. Commonwealth citizens and most European nationals do not need visas for visits of less than three months. Visitors are usually issued an extendable 30- or 60-day visa on arrival. No visa is required for a stay of less than one month for nationals all ASEAN countries except Myanmar. For a stay exceeding one month a visa will be required, except for nationals of Brunei and Singapore.

Healthcare

Malaysia features a high number of world-class private facilities. As for vaccinations, immunization against hepatitis A is advised. Malaria risk exists throughout the year in rural areas throughout the country. There is no risk in cities and the main tourist resorts. Food and water-borne diseases are common. Use only bottled or otherwise sterilised water for drinking, brushing teeth or making ice. There has been an increase in the reported cases of dengue fever.

Travellers to Malaysia are unlikely to be affected by Avian Influenza, but should avoid visiting live animal markets, poultry farms and other places where they may come into close contact with wild or caged birds; and ensure poultry dishes are thoroughly cooked. Rabies is present. If you are bitten, seek medical advice without delay. Health insurance is recommended.

Travel

Malaysia’s major cities and tourism hotspots are all easily accessible by air, some with international airports, including Kuala Lumpur, Penang and Langkawi.

The country also has an excellent rail and road system. A main highway in western Peninsular Malaysia extends over 800 km from Singapore to the Thai border. There are five road border crossings between Malaysia and Thailand and a west-coast rail link. Looking south to Singapore, travellers can use the causeway at Johor Bahru, catch a ferry or take the train.

Travel by road in Sabah and Sarawak is much more challenging than in Western Malaysia. There is a main road that runs along Borneo’s northern coast but interior roads are sketchy.

As for train travel, the state-owned railroad system is comprised of 1,667 km of track. Most of this is in West Malaysia but there is a short stretch in Sabah.