Invest In Malaysia Property

Quick Guide On Malaysia / Kuala Lumpur / Johor Bahru Property Market- Stay Informed

Located in South East Asia north of the equator the country is comprised of two noncontiguous regions Peninsular Malaysia and East Malaysia situated on the island of Borneo. The country has a vibrant economy with beautiful and scenic scenery making it an attractive spot for investment in Malaysia

For Singaporeans Malaysia property market is the perfect destination to store your wealth, with the market projected to grow gradually over the years, there is a prospect for huge potentials for any investor.

 

Kuala Lumpur & Johor Bahru property market are the major drivers of the Malaysian budding real estate market. In this article, we are going to discuss all the important aspects of the Malay real estate sector.

Kuala Lumpur

Gross Domestic Product

Kuala Lumpur is the only global city in Malaysia with a population of 7,563,912 as at 2018. The city is amongst 3 federa l states enclaved within the state of Selangor. The state is one of the largest contributor making up 23% of the country’s overall GDP.

Kuala Lumpur had a GDP per capita RM48,091, the growth in GDP is partly attributed to favorable performance in key sectors such as manufacturing and service sectors. The Sustainable Development Goals 2030 has been crucial in steering Kuala Lumpur economic development.

Economic growth

Kuala Lumpur is one of the most industrialized and fastest growing regions in Malaysia. The city still remains an economic and business hub of the country with a thriving financial, real estate, insurance sectors.

Accounting for more than 20% of the GDP, 2018 witnessed increased productivity with the city being 67% more productive compared to the rest of the regions in the country. Consumer spending per household was 59% higher than the rest of the country as a result of middle-class emergence. The city has one of the highest disposable incomes per household ($35,500) within ASEAN nations

Strong employment within the capital has boosted consumer spending and investments which has driven the overall growth of the country which stands at 5.3% in 2018. Massive infrastructural development within the city such as the establishment of the Multimedia Super Corridor and expansion of port Klang has boosted connectivity with regional and global market easing trade activities.

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KEY MALAYSIAN INDUSTRIAL SECTOR

Tourism

Tourism plays a key role in the city’s service-oriented economy, Kuala Lumpur among the most visited cities in the world, according to the ministry of Tourism, Arts and Culture the city are on track to meet its initial target of approximately 9 million visits each year. 

In 2018 there was a drop in inbound visits from Indonesia and Singapore, but the gap has been offset by increased arrivals from Chinese tourist. Singaporean tourist account for almost half of visitor arrivals in Kuala Lumpur as more Singaporeans is looking for investment opportunities in various sectors of Kuala Lumpur especially the KL property market.

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Why invest in Kuala Lumpur?

Strategic location

The city is located at the center of ASEAN providing direct connectivity to both emerging and major markets within Asia making the city the perfect location to establish and grow your business.

Business-friendly environment

Kuala Lumpur has attractive fiscal packages with a conducive policy framework that has increased the ease of doing business eliminating government red tapes and bureaucracy. In World Bank’s Doing Business Report 2017 Malaysia especially the capital ranked 23 out of total 190 countries.

Infrastructure

The capital has experienced massive infrastructural upgrades over the years with newly launched projects such as Kuala Lumpur-Singapore High-Speed Rail slated for completion in 2026, Mass Rapid Transit/Light Transit, MRL East Coast Rail Link will open up the capital to the global economy. The City has busiest airport and seaport boosting trading activities and easier movement of goods and services.

The city also has advanced telecommunication services with internet connection speed of up to 8.9 megabits per second cutting down on the cost of doing business.

Market overview

As Kuala Lumpur becomes, more and more congested developers are strewing towards integrated mixed developments comprising of hotels residence, kl condo, and commercial spaces. With increased population, the government has set its sights on safe and affordable housing attracting both local and foreign developers to construct residential units to meet the ever-growing demand.

Kuala Lumpur is a preferred location to purchase property due to developed infrastructure providing access to almost any region from the capital. Proper infrastructure is going to increase traffic from Singaporean investors as they look to capitalize on increased on both retail and commercial markets.

The 1H 2018 continued to witness developers and operators of selected shopping centers embarking on asset enhancement initiatives to counter challenges in the retail sector and to continue attracting shoppers and tenants alike.

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Supply trend

For office market, the Q4 2017 witnessed project completion of 2 major commercial buildings JKG Tower and Ecocity Tower 3 adding a total of 810,000 square feet to the overall Kuala Lumpur property market.

For Kuala Lumpur condo condominium units 5 projects were completed in 2017 adding 6,113 unit’s high-rise residential units to the market a double increase from its previous year. In 2018 5,130 prime residential units are expected to complete.

On the retail market front, no new mall was completed in the city center during the 4th quarter of 2017. However, for the suburban market Phase, 2 of Mitsui Outlet Park KLIA Sepang added 215,278 to the total stock.

Demand trend

Office space demand in Kl CBD remained strong as a result of increased vacancy rate of 0.2% in the Q4 of 2017. In 2018 its expected the vacancy rate will rise as 5 new projects are slated for completion.

Demand for residential properties has improved during 1H2018 as developers become more and more aggressive by participating in countrywide road shows and exhibitions. In 2H2018 its predicted as there will be increased residential transactions as the market activity picks up the pace.

Kuala Lumpur Projects

So Sofitel Kuala Lumpur Residences

Located in the exclusive area in KL, the project will be 78 stories with 590 units comprising of a mixed development of 181 hotel rooms and 267 home units while the So Sofitel tower will offer 207 hotel rooms and 590 home units.

The residence will have first-rate facilities with amazing views of the capital skyline that will leave you in awe. The project is slated to be completed in 2023.

The Luxe KL

Situated in No. 18, Jalan Dewan Sultan Sulaiman, KLCC, KL City, Kuala Lumpur, the condominium project will have 723 residential units and 31 commercial units. The property is right at the heart of Kl providing you with instant access with whatever you may need.

The suits are close to major expressways and MRT stations providing direct access to every part within the region. The project is slated for completion in 2020

Johor Bahru

Gross Domestic Product

Since 2011 Johor Bahru economy grew faster than the country’s economy. In 2017, Johor has a GDP of $24.7 billion. The city has an estimated population of 497,097 while its greater metropolitan area has a total population of 1,638,219 making it third largest in the country.

The vibrant growth of key sectors in Johor Bahru has boosted the city’s GDP growth rate underlining a strong momentum of the overall country’s economy.

Economic growth

Johor Bahru is tipped to become the second largest state economy, with an economic growth rate of 5.7%, it’s the fastest growing economy amongst 12 12 states. The main economic driver of this city is massive infrastructural projects with the construction sector growing by 24%. Amongst the 12 states, Johor Bahru had the highest increase in the consumer price index at 4.3% echoing it’s strong economic and market conditions

Increased accessibility has increased visitor arrivals especially from Singapore who visit the city for business and pleasure due to close proximity to their country. Other key sectors have expanded during the same period such as oil and gas, green technology, manufacturing of Halal based products, logistics and service industry have spearheaded the overall growth of Johor Bahru.

The state also received a massive boost from the Federal Government with multi-billion ringgit mega projects to be to be launched within the state within the next 10 years improving its infrastructural capabilities

In 2018 the State Government have laid plans to diversify its economy reducing it over dependency on manufacturing sector pushing the state to become a regional economic powerhouse.

Key industrial sector

Tourism

The city has ceased to be a transit point for tourist to become a popular tourist destination playing a vital role in the state economy. According to The Department of Statistics, Johor was number 3 in attractiveness bringing in 2.6 million international tourists.

For Singaporeans Johor Bahru is a prime destination spot for both travel and leisure as more and more Singaporeans troop the country for shopping as well as looking for investment opportunities especially in the Johor Bahru property market.

Reasons to invest in Johor Bahru

Increased connectivity to Singapore

The newly planned rail service connecting Johor’s Rapid Transit System and Singapore’s MRT system will enhance cross-border connectivity and boost property prices in both countries. It will also allow easier and efficient movement of goods and services.

Tourism potential growth

Johor close proximity to Singapore and international hub will provide a cheaper alternative to tourist boosting visitor arrivals. Growth in the tourism sector will create a market gap in hotel and residence sector that can be capitalized on by developers to curb increasing demand. High economic growth and yield returns are enticing to any property investor.

Booming economy

Since 2016 a lot of Multi-nationals have expressed desires to shift the Asian headquarters to Johor partly due to the Government’s vision to turn Johor into an “e-hub” with designated free-trade zone area. According to the Malaysian Industrial Development Authority, the manufacturing sector has received more than US$4.2 billion in proposed direct capital investment.

Johor Bahru property market

The prospects of jb property continue to remain favorable with increased market activity from the previous year. Residential properties still remain the preferred choice by both real estate investors and purchasers.

In 2018 the jb real estate began to gain momentum at a slower pace indicating growing confidence of buyers and investors who are showing more positive market sentiments. Johor’s property market outlook remains more positive than before as more mega infrastructure developments are slated to be launched in the coming years.

Supply trend

The supply of industrial properties has constantly increased over the years, and in 2017 it stood at for both terraced, semi-detached and detached types. With terraced factories accounting for 56% of the total supply. Over the next two years, there will be a further addition of 1,736 industrial units a 16% increase in the total stock.

For the retail market, the total supply as at 2016 stood at 13.53 square feet with the newly completed Mydin Pelangi Indah in Ulu Tiram adding 142,224 square feet. The retail market over the next two years will see the addition of 4.33 million square feet.

For office market, there will be newly launched projects in Medini and Eco Botanic, Iskandar Puteri and 4 located within Johor Bahru city center. Once completed the projects will add 2.4 million square feet of office space.

The existing supply of high-rise residential units in 2016 was 43,898 units marking a 16% rise from the previous year. With 15 high-rise development units being completed in e 2H2015 adding y 9,025 units to Johor Bahru new property market.

Demand and price trend

2017 was an active year for the office market sector recording total transactions amount of up to RM1,241 million. For high rise residential units, the sub-sale market was RM370 per square feet or about 11% lower than last year, and transaction volume is 50% lower than the previous year.

The vacancy rates in the retail market dropped by 22%, with the average rental stayed stable at RM27 per square feet per month for retail malls located in prime locations. The occupancy rate for hotels in Johor Bahru will remain steady whilst room rates will increase slightly due to inflation. The overall hotel market is predicted to remain healthy and stable over the coming years.

Property taxes in Malaysia

When buying or selling property there is stamp duty payable by the buyer; the rate varies from 1-3%. There is 30% capital gains tax for disposing off property within 5 years and 5% when disposing property from the 6th year or later. 

For commercial and residential properties Malaysian taxation for rental income for non-residents stands at 25%. There is no inheritance in Malaysia and beneficiaries are free to inherit your property without additional financial cost when transferring ownership.

Buying property in Malaysia for Singaporean

Foreigners can 100% own property as long as they comply with Malaysia property laws and minimum requirements. The law also allows them to buy any type of property both commercial and residential as long as the property value is within the set limit of their state. There are also no limits to the number of residential properties you can own as a foreigner.

Down payment is usually around 10% of the total purchase price. They are payable in two installments a deposit of 2-3% is paid when you sign the Letter of Offer/Acceptance. Then you must pay the remaining 7-8% deposit when you sign the Sale and Purchase Agreement; this must be done within 14 days of signing the Letter of Offer/Acceptance.

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Johor Bahru projects

Suasana

Located at Johor Bahru city center, the mixed development unit is 36 storey with 355 units. The project has 13 built-up layouts that you can choose from. The property comes with a freehold tenure proving future residents with the opportunity of becoming permanent owners.

The apartments are close to world-class facilities offering you a modern luxurious lifestyle. It also has world-class facilities providing you with first-rate services for both you and your family.

FINAL VERDICT

Malaysian reals estate sector in Kuala Lumpur and Johor Bahru will experience rapid growth as a result of strong economic policies and government support. For Singaporeans, this is the perfect opportunity to invest in Malaysia. 

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