Increasing residential property prices force China to invest in cheaper Malaysia real estate
The heart of Kuala Lumpur, Malaysia’s capital City
According to Real Capital Analytics, over the past three years, China has invested over $2.1b in Malaysia real estate. They have overshadowed Singaporean investors, who have only spent $985m in KL property and other Malaysia home investments. For Chinese property investors, Malaysia real estate investments have transpired as cheaper alternatives to properties in Australia and Hong Kong.
Singapore has always been one of the biggest outbound property investors in Asia and the largest foreign investor in Malaysia properties, but China made its way to the top, during the time when Beijing and Kuala Lumpur had warmer political ties.
Malaysia’s unpolluted skies, close proximity to Singapore’s shopping and night life, and low cost of Malaysia real estate have allured some Chinese expatriates to invest in the Malaysia property market.
The managing director of Asia-Pacific research at Cushman & Wakefield, Sigrid Zialcita said in an article on Financial Times, “The Chinese investor today has a lot more options and has become more comfortable going to Europe and the US, but not everyone has the same options – Malaysia is much more affordable.” She also added, “If you compare prices, even between Malaysia and China, you are looking at a significant difference.” Prices of properties in China’s prime cities have sky rocketed over the past year, making it some of the most costly residential developments in the world.
According to the Malaysia’s tourism minister, a foreign residency program was launched in 2002 declaring 8,000 Chinese citizens to be given the right to live indefinitely in Malaysia. This policy, which is called Malaysia My Second Home, has been taken advantage mostly by the Chinese and 4,000 Japanese out of a total number of 32,000 foreigners that have been given residency since the policy started.
Real estate group JLL said, internationally, China’s residential, industrial and commercial overseas property investments have grown to a new high in 2016 with a total amount of $33b.
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