Even though it may seem pretty overwhelming, property investment in the Malaysian real estate market could be highly rewarding. Property investment is certainly not supposed to be a short-term play. Most of you should know this fundamental rule but do you need to wait for long to reap the benefits? As per real estate experts, it would be taking around five years for enjoying a remarkable capital gain from your property investment as per the location. We understand that for established areas in Malaysia it would take a much shorter time.
In Malaysia, property prices are supposed to be among the cheapest or the most cost-effective in Asia having reasonably good progress in terms of a resilient economy. Regional property markets such as Singapore and Hong Kong have been escalating excessively in the last few years so they are now determined to take a breather. Because of the astronomical prices in the past, foreign investors started shying away from investing in these two highly popular Asian cities.
The location factor could be of major consideration in terms of property investment. You must do adequate research to understand and analyze the future potential of a particular location or area. When you are successful in identifying the growth prospects or the future catalysts, you must make the buying decisions at the initial stage when prices are quite low.
Property investment in Malaysia could assist you in accumulating wealth. Let’s examine the rise of average real estate or house prices in some selected regions in precisely the Klang Valley during the last 17 years. To understand the real estate price scenario in Malaysia, let us examine an example. If you had bought a single-story terraced house just for RM 150,000 while in Puchong. We understand that Malaysia’s property price escalation is certainly more stable in comparison to the equity market. As per the given data, if the property was sold in the year 2010, you could potentially get an average price of almost RM 237,500 which implies that the actual capital appreciation was as much as 40 percent. In 2017, the average sale price had gone up to RM 512,500, hence; if the same property was sold in 2017, you could have enjoyed dramatic capital growth of almost 241 percent.
When you consider the economic metric of per capita GDP, Malaysia stands tall as Asia’s third-richest country. They have living standards comparable to several developed economies, and a market economy that performs better than similarly emerging markets. In recent years there have been some issues due to weakened exports and lowered oil prices, but the Malaysian government has diversified its financial base enough to move past this temporary stall.
The Malaysian GDP grew by 4.4% year on year in 2019, which is not much lower than the 5% recorded by Indonesia, which is far less developed and hence expected to grow at a much larger rate and way more than the poor figures recorded by Thailand. A boost in the economy is correlated to higher purchasing power among consumers in the country, thus causing an increase in investment sentiment, especially in real estate. Demand is hence on the rise, and home values are expected to go up across the country in the coming months.
Malaysia is certainly one of the most affluent nations in the region. However, Malaysian property values are supposed to be the lowest in Southeast Asia. You could still think of buying city-center condos for much less than RM 8,000 or USD 2,000/square meter. That’s supposed to be even less expensive as compared to Hanoi or Bangkok that are certainly less developed cities. The strong demographics, robust economy, and truly rock-bottom prices are some of the factors that make Malaysia a great option for genuine investors.