“With the implementation of the Economic Transformation Programme and the Greater Kuala Lumpur, the real estate sector is set to experience skyrocketing demand in the coming years,” he told The Borneo Post.
Compared to other property segments, landed houses saw the highest demand this year and the same is expected for 2013 and 2014. One of the factors that contributed to the domestic demand was the country’s growth rate of between 2.2 and 2.3 percent, as well as the rapid urbanisation of Malaysia.
“In the 70s, the degree of urbanisation in Malaysia was only about 30 percent and it increased to 40 percent in the 80s. Now, the degree of urbanisation in the country is between 55 percent and 56 percent,” he said, adding that 200,000 houses were sold in 2011, of which 50 percent were new properties, with the rest being resale properties.
At the same time, people need not worry that a property bubble is looming. Of all the properties sold in 2011, only 1.8 percent was bought by foreigners, unlike in Singapore, where over 39 percent of properties were sold to expatriates, he said.
In addition, property prices in Malaysia are still one of the lowest in the ASEAN region.
“The best that we have is the KLCC area, with an average selling price of US$500 psf (RM1,525 psf). In Singapore, you will be paying US$2,000 (RM6,103) for the same area, while in Jakarta, you will get it in between US$700 and US$800 (RM2,136 to RM2,441),” he added.
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At present, 2 percent of the total property sales in Malaysia come from foreigners, compared with Singapore’s 30 percent. Taking into account that about 120,000 new units enter the market each year, this translates to 2,400 properties.
The government has also introduced measures to cut red tape and enhance the delivery of public service at all government agencies both at federal and state levels.
Moreover, Malaysia is eyeing to attract thousands of expatriates to Iskandar. Three times the size of Singapore, this region will feature an education hub, leisure facilities, a financial district, as well as residential and commercial areas.
European expatriates based in Singapore are planning to relocate to Malaysia due to its cheaper property and low cost of living. Many have already purchased homes in the southern part of the country.
According to Jason Thoe, Head of Marketing at PropertyGuru.com.my, investors are flooding in to Malaysia from Singapore, China, Japan, South Korea and Hong Kong snapping up residential properties in Johor, Kuala Lumpur and Penang.
Ho Hon Sang, Managing Director (property development division) at Sunway Bhd, added that Chinese, Japanese and South Koreans are coming back to Malaysia to invest in properties.
“The country’s leadership and branding is important to attract foreigners here. The government is (also) addressing the issue of affordability so that all Malaysians could own a property,” added Ho.
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