Malaysia’s luxury property market shows solid potential to rebound in 2010, and is likely to be one of the first and fastest to recover from the global economic downturn. This sector is expected to thrive, with a steady climb in launch and resale prices, and is fast emerging as a highly lucrative option for foreign property investors.
A World Bank report had highlighted positive findings on Malaysia’s economic health in November 2009 – it was declared to be emerging from the economic slump, and will return to moderately high growth in 2010. Forecasts had held Malaysia’s gross domestic product at a decline of 2.3 percent at the end of 2009, before growing 4.1 percent in 2010.
The economic expansion is expected to spur demand for commercial and residential property, including the luxury sector, resulting in an increase in rental accommodation and prices. In the wake of its economy recovery, Malaysia will continue to reinforce its appeal as an attractive destination for work and living, leading to rocketing demand in the luxury sectors, which allows foreign purchase.
This market surge will also be strengthened by the government’s new Malaysia My 2nd Home initiatives, encouraging more foreigners to retire and live in Malaysia. Malaysian banks are also reported to be in good health, ensuring that credit will be available to meet the growing take-up rate of property.
Malaysia’s luxury sector provides strategic investment opportunities, as its prices are a fraction of the cost of similar properties in the US and UK, and are still below peak compared with the region. In addition, with the value of its local currency pegged below the Euro, Dollar, and Sterling Pound, foreign investors enjoy the benefits of getting more worth for their money.
Its favourable status is further boosted with a whole host of other perks including a favourable tax regime.
High-end developments, especially in Kuala Lumpur, have proven to be highly desirable to foreign investors, as they feature premium facilities and quality finishing, with top line design that combines practicality, usability, and luxury touches. They are also located in prime locations, guaranteeing strong capital appreciation and rental yields of around 8 – 10 % for long term investors.
Despite the sluggish performance of global property markets, demand for Malaysia’s luxury market will pick up and continue to grow at a steady pace in 2010, as it catches the attention of affluent and shrewd foreign investors seeking to park their investments elsewhere.
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