Despite the continued strength of the Malaysian economy which is predicted to enjoy growth in the region of 5.8% this year, and the popularity of the nation as a business hub in the still affluent Asian region, the recent ‘United Nations Economic and Social Survey of Asia and the Pacific’ report highlights the fact that the Malaysian property market is not immune to the global financial situation.
Whilst Malaysia is relatively well positioned to survive any pending global economic slowdown in many sectors of its economy thanks to the fact that it is an oil exporter and has managed to diversify its export base to include emerging markets, real estate is one area of the economy that could well be hit hard.
Well, we’re not the only ones hot on Malaysian property at the moment it seems – Deutsche Bank are right there with us and their chief Asian strategist in Hong Kong Mark Jolley recently went as far as saying that he ‘likes pretty much anything that’s a property play in Malaysia’ at the moment.
In this article we explain exactly why there is great potential for property related profit in Malaysia at the moment and what the longer term prospects are for the market.
The key issues raised consistently when undertaking research for the Amberlamb ‘Malaysia property market analysis for 2007’ report were that there is enormous potential for growth in Malaysia with the commercial market potentially outstripping the residential in terms of instant attraction in 2007, but that an investor in residential real estate really needs to pick their properties carefully if they are to see any short term appreciation.
Over the medium term Malaysia property is seen as an exceptional choice for international investors because, in the words of one of the largest real estate companies in Asia, Malaysia’s real estate industry has “tremendous growth potential.” Added to this are positives such as the fact that the Malaysian currency is cheap when compared to the US dollar, Euro or British pound and international buyers can get so much more for their real estate money in Malaysia.
The Central Bank of Malaysia has just released its official findings relating to third quarter 2006 growth patterns in Malaysia and their figures indicate that the nation is continuing its recent trend of steady growth and that the real estate sector is just one of a number of sectors that have been significantly boosted particularly as a result of foreign direct investment.
It seems that in particular property in Malaysia is favourite with Middle Eastern investors who are seeking a nation offering them impressive investment growth potential, an opportunity to dominate the luxury property development landscape, a location where infrastructure is improving, where the investment climate is sufficiently transparent and ripe, and more importantly, where there is access to sophisticated Islamic finance solutions.
The general news from the property market in Malaysia at this time is very positive indeed; it points towards a sector whose participants are geared and committed toward the positive development of property in Malaysia as an internationally attractive investment commodity.
It’s a fact - Malaysia is heating up as an emerging property investment destination with an active tourism and business professional rental market that’s luring in increasing numbers of international property investors. Malaysia property rental is proving to be a profit centre for a growing number of investors seeking a medium risk emerging market with an increasingly transparent property purchase and ownership process, where rental rates are expected to rise and vacancy rates are expected to fall for at least the medium term.
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