Malaysia Is Still Top Property Hotspot for China
Malaysia remains a top property hotspot for the Chinese even though overseas real estate investment by this group slumped by 82.1 percent in H1 2017 based on data from the Commerce Ministry.
Although Beijing has restricted overseas property investments in a bid to limit capital outflows and strengthen the yuan, these rules mainly apply to private individuals and companies and not state-owned enterprises (SoEs), said an insider working for such company.
The source from a large SoE told China Daily Asia Weekly that government-owned entities can still purchase real estate in other countries as long as they follow the proper procedures.
In fact, the insider's employer is considering to acquire several land parcel in Kuala Lumpur and the transactions are expected to be finalised by year-end.
According to Knight Frank Malaysia Managing Director Sarkunan Subramaniam, Chinese property players are still interested in purchasing development land and other properties here even though it's now difficult to wire money abroad.
"I know a large private developer from China, who even after the capital controls has nearly inked a deal for one large tract of land" he said, adding that the firm intends to establish an office in Malaysia to kick-start their operations.
Despite Beijing's restriction on money outflows that has negatively affected sales in some developments, he thinks that the property market here will continue to attract Chinese investors in the long term due to Malaysia's favourable foreign residency scheme as well as the strong ties and cultural similarities between both nations.
Another reason is Malaysia's significant participation in China's Belt and Road initiative.
Furthermore, Knight Frank revealed that Malaysia was the third top foreign property market for Chinese developers in the last five years. Investors from China's mainland also accounted for most of the property deals here by foreigners, which accounted for 35 percent of all transactions.
"The size [of investment from developers from China] will reduce, but it will still be large" added Sarkunan.