Tips for property buys in Malaysia
IF YOU want to invest in Malaysia now, do three things, said property experts at a MyPaper seminar on Saturday: Look further into the future, go against the herd mentality and invest in less popular areas.
Giving investment tips and weighing in on the recent property cooling measures implemented by the Malaysian government, the three experts left potential investors in the 250-strong audience with this: It's not too late to invest across the Causeway.
In October last year, the Malaysian government announced a slew of property cooling measures to quell speculative activity in the property market.
The measures included doubling capital gains tax for foreigners to 30 per cent for real estate sold within five years, and doubling the minimum purchase price for foreign property buyers to RM1 million (S$380,000).
The result, said Ms Cassandra Tio, Malaysia-based property developer Hatten Group's sales and marketing head, was an up to 50 per cent drop in sales in the Iskandar region in the third quarter of last year.
But Ms Tio said that investors should not turn away. The trick is to look at the mid- and long-term prospects of a property, instead of seeing it as a short-term investment.
"Investing now in areas that are still in the midst of budding, such as Malacca, Kuantan and Ipoh, will give a first-mover advantage," she said, speaking at the MyPaper Advance Series Seminar 2014, themed The Smarter Way to Buying Properties in Malaysia.
Ms Tio explained that after five years, the prices would have appreciated and, by then, the foreign seller would incur a substantially lower capital gains tax of 5 per cent.
While these areas are admittedly more far-flung as compared to a popular location like Iskandar, experts said the merits lie in their smaller dwelling densities.
Mr Donald Han, managing director of property consultancy Chesterton Singapore, said developments with around 300 units are ideal as it would mean less competition when renting out or selling one's unit. "Invest in scarcity," he said.
Mr Han also pointed to Johor Bahru City Centre as an area with good investment opportunities, especially with properties close to the upcoming rapid transit system (RTS) - expected to be completed by 2018 - which will link Woodlands to Johor Baru (JB).
He said property values in Singapore typically increase by up to 20 per cent within five years of the date of announcement of the building of an MRT station, and he expects similar appreciation in prices for those locations close to the Malaysian side of the RTS.
Mr Johnny Pay, 52, an audience member at the three-hour seminar, said that the knowledge he gained from the talk would help him make a decision on whether to buy a retail unit in JB.
"The speakers gave important market information like where the new developments are and their investment potential, which are otherwise quite limited," said Mr Pay, who is currently self-employed.