Asia-pacific provides a great mix of residential real estate investment opportunities for the speculative purchaser, conservative investor, owner-occupiers and holidaymakers. Residential projects within the Asia region have been extremely buoyant over the past two years, particularly in cities where we’re seeing rapid growth in urbanization driven by strong economic development, commerce and favorable legislative changes to foreign investment.
Malaysia and Thailand have probably been the two biggest markets within the region that have attracted foreign investors. In Malaysia, residential development has been primarily focused within Klang Valley, encompassing the KLCC area and surrounding suburbs. Malaysia has shown signs of strong growth based on the fundamentals that support real-estate capital appreciation. Population growth, increased tourism, relaxation of foreign-investment regulations and consistent GDP growth (above 4% per annum) provide a stable base on which to grow. Malaysia’s recent introduction of the ‘Malaysia My Second Home’ programme, aimed at attracting foreign retirees and medium-term vacationers, has already seen positive results in real-estate capital appreciation.
Inner-city apartments located around KLCC and the Petronas Twin Towers have been a major focus for local Malaysian developers, who have been keen to capitalize on a growing expatriate-influx and affluent local professionals. For the investment market, yields for typical apartments can range between 5 - 8% and are expected to rise with capital values in the medium to long term.
While there are a substantial amount of residential projects currently under construction in Malaysia, few development sites remain for residential use, which will support both the rental market and secondary sales market. Furthermore, we expect rising capital values to be sustainable given recent banking regulation changes allowing foreigners to leverage up to 90% of the property’s value, bolstering return on equity for investors.
Does Malaysia Offer Significant lifestyle property opportunities?
Yes, the lifestyle and resort market is also experiencing very strong growth. The emergence of strata hotel/resorts around the region has seen a new product line evolve that provides investors with a balance between a second home and investment property. Asia’s growing number of budget airlines and increased international direct flight routes will further attract tourism to the region, driving rental yields and occupancy for lifestyle-type property.
Tourism in Malaysia is set to grow exponentially, with a slowdown in the Bali market and density of mature resort destinations like Thailand. Existing but relatively un-tapped destinations like Langkawi, Kota Kinabalu, Penang and Port Dickson are all earmarked for redevelopment to international five-star standards. Over the last year, we’ve seen two of the largest multi-national hotel chains establish themselves in Malaysia (Four Seasons Langkawi and Le Meridien Kota Kinabalu. This trend will continue as tourism continues to be driven into Malaysia. -- Luxury Properties magazine