There is no “right” or “wrong” time to buy a property. Dr. Victor Gan, a malaysian property public speaker once said “there are always property gems in the market, you just need to know where to look.”
Well, look no further because there are plenty here in Malaysia. Although his advice rings true, there are still programmes and schemes that we should take advantage of, especially when you already have plans on buying a home in the first place, both for own-stay or for investment.
With the sudden spike of interest in foreign investment within the local property scene, it is about time we take a look into the Malaysia My Second Home programme (MM2H), how it benefits both foreign buyers, and its potential effects on the local market.
What is MM2H?
MM2H is a government initiative that aims to attract foreign expatriates, to paint Malaysia as a serious option for migration rather than just another tourist destination. The initiative includes visa programmes for education, job applications, car purchases, and of course, home purchases.
The scheme provides a renewable ten-year, multiple-entry visa for successful applicants from around the world.
2019 has been a very interesting year, with many major political and economic events happening across the globe. With many uncertainties floating around, foreign investors are on a constant lookout for ways to safeguard their investments.
Investing in foreign emerging markets is a great way to do just that. Doing so pose significantly less risk, and there is a higher chance of seeing a better return-on-investment.
This is great news for developing countries with plenty of room for growth, and Malaysia is topping the list in terms of desirable candidates especially with the introduction of MM2H. Which leads to my next point:
2. Growing economy
The ASEAN region as a whole has risen in the ranks in terms of productivity and technological advancement. In fact, Malaysia has landed itself in the 15th spot in the World Bank’s 2019 Doing Business report, being one of the easiest places to start a business out of 190 economies.
A 2019 trade report states that: “Foreign investment in Malaysia has been oscillating between USD9 billion and USD12 billion since 2010, making the country one of the highest recipients of FDI in the region.”
“Authorities seek to position Malaysia as a gateway to the ASEAN market by offering various incentives to foreign companies, notably the status of pioneer company and tax reductions associated with investments. The country benefits from a high-skilled and English-speaking workforce.”
A strengthening economy will translate to a growing property market, making Malaysian properties a safe haven for foreign investment, further incentivising the application for MM2H.
3. Ease & Affordability
The MM2H programme is probably one of the world’s most flexible long-term visas, allowing applicants to purchase local properties with relative ease. Assuming that the applicant is looking to move into Peninsular Malaysia, here are the eligibility requirements.
|Age 50 and below|
|Age 50 and above|
Considering the relatively weak Malaysian Ringgit, fulfilling these requirements is not exactly difficult for applicants from first world countries.
|State||Property Purchase Price|
(Only Strata properties are eligible)
(Update: The ceiling price for foreigners to purchase Malaysian properties has been lowered to RM600,000 in Budget 2020. However, concrete details have yet to be announced.)
Despite imposing a minimum floor price for property purchases (which varies state to state), property prices here in Malaysia is also significantly cheaper in a global context. In fact, houses in Kuala Lumpur are among the cheapest compared to 34 other cities worldwide, according to the latest Global Living report by CBRE.
With a growing interest from foreign buyers in recent months, and the federal government implementing heating measures across the board, how exactly will it affect the local property market?
1. Reduced overhang units
In the latest Q1 2019 report released by the National Property Information Centre (NAPIC), our current overhang numbers have reached an all-time high of 54,000 units, a 5.5% increase from the previous year.
However, with these heating measures in place, we can expect these numbers to decrease somewhere in the near future. Lowering the barrier for foreign buyers would help local property developers clear off their current existing inventories. In fact, developers are encouraging even more aggressive measures, asking for the reinstatement of the developer interest-bearing scheme (DIBS).
2. New & Better Property Launches
With signs of market improvement, local property developers would most likely capitalise on this sudden uptick and growing demand. They would be actively, or even aggressively acquire land, and start planning for new property launches.
This would lead to better and more options for local and foreign homebuyers. In fact, we are already starting to see some innovation in the industry. There is the introduction of modular building systems, and user-input projects such as the “dto” program from Sime Darby Property.
If you are interested in visiting some of these showrooms, you can always book a FREE Car Ride to your next viewing through Ohmyhome.
Considering the factors above, 2019 is definitely the year for foreign investment in the local property market. MM2H is probably the easiest and the most direct outlet for foreigners to acquire Malaysian assets, but it is not the only avenue available.
Looking to invest in Malaysia properties, but don’t know where to start? Browse the latest project launches from top developers and schedule showroom visits, for free. Interested in learning more? Call us at +60 16-299 1366 to talk to our friendly customer care team now!