Foreign investment into Malaysia property is largely focused on 4 states - Selangor (Kuala Lumpur), Penang, Johor (Iskandar) and Sabah (Kota Kinabalu). The common theme across these markets is they are all oversupplied with too many properties and too little people and jobs to support them. But dig a little deeper you will find very diverse markets that are struggling through their market bottoms in all different ways. One thing for sure though, the forces to save these markets will have be external as the country itself has essentially exhausted its local demand.
The combination of market bottom, desperate developer, weak MYR and strong external demand from countries such as Hong Kong and China meas that it will be easy to be overtly marketed to through developer incentives and lack of market knowledge to end up buying the wrong asset.
At RunningStream we are determine to focus narrowly on completed, high quality and prime location assets which are now significantly discounted due to market conditions. Such properties with proven value and quality will be the first to move when the market eventually turns upward in our opinion.
While it is true that Malaysia is at a bottom, it is at these times that being selective about what you buy and being clear about intent and plan is important. Else it would be easy to end up, as we commonly experience, buying things which we do not need simply because it is cheap. This is especially true as developers are throwing in all sorts of incentives to bait buyers. In helping buyers to take advantage of this market, we would recommend the following.
Once we are clear about what the buyer is looking for we will then proceed to source the right property for their needs.
In the current Malaysia market condition there is really no point buying anything but the top end of the market in premium locations experiencing the most pain and discounts. Completed properties are preferred simply because quality of construction is not a given even with the best developers in Malaysia and there is no need to buy off plans when there are plenty of good ones that can be physically examined. While the resale market might not offer the same incentives, these incentives are priced into the purchase prices anyways so that's of no significant consequence. In sourcing for Malaysia assets, we will take into consideration the following.
Once the above factors are taken into consideration we can then look to identifying the right property for the buyer.
Malaysia poses very little restriction on foreigners buying into the market except for fairly negligible foreign consent fee and minimum prices. The same lack of regulatory control can also mean you cn get rather creative with strategies and financing. We help our buyers navigate the purchase process by providing the following.
Purchasing a Malaysia property can be rather straightforward. However, the challenge lies in the market and not the process, in contrast with Australia.
While lending has certainly tightened over the years in Malaysia, there are many options still available across local and foreign banks that makes it much easier for foreigners to participate. Our client service department works with several banks across Malaysia, Singapore and Hong Kong to support our buyers with their acquisitions.
Property management is the Achilles Heel of the Malaysia property market. Given its severe oversupply condition that is no surprise. However, in Malaysia's case the situation can be rather severe. Byying the wrong property means low rental and that exposes a property to all sorts of tenants that can give buyers severe grief. Collection issues can sometimes be the least of the problems, misuse and abuse of the property can be quite common.
Hence buying the right property that attracts the right kind of tenants and having the right agent to manage it is very important. Our service will include the following.
Malaysian property can be challenging to manage in contrast with Australia but such is often the case when you buy into any severely oversupplied market.
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