THE PULL FACTORS AND AREAS OF INTEREST
The top searched areas for mainland and Hong Kong Chinese property buyers are Kuala Lumpur, Penang and Johor Bahru. The main intention to purchase was primarily for investment and retirement.
“Malaysia is an attractive investment destination. The Malaysia My Second Home Scheme (MM2H), and friendly foreign investment policies have made Malaysia a great choice. Language is no barrier as Malaysians also speak English, Cantonese and Mandarin. The political stability, freedom from natural disasters, and great education and medical facilities are also key selling points. Malaysian properties are much larger than what’s available in Hong Kong and cost a fraction of the price, “ shared Chmiel.
“The median cost for a house in the state of Johor is RM350,000 (US$84,000). A 300 sq ft apartment in Hong Kong, despite being much smaller than the average flat in Malaysia, would cost six times more.”
The Global Real Estate Bubble Index for 2018 has revealed that Hong Kong had the world’s most overvalued housing sector.
“According to a social policing group, Demographia, a study which compares average household income with average house prices has shown that Hong Kong has the world’s least affordable property market for the past nine years. Hong Kong’s housing shortage is also problematic, buoying sky-high prices and pushing Hong Kong residents to seek properties overseas,” said Chmiel.
Data from Hong Kong real estate agency Centaline shows that residential property prices in that city have rocketed by more than 200 per cent over the past decade.
THE LURE OF THE MALAYSIA MY SECOND HOME SCHEME (MM2H)
The Malaysia My Second Home Program program, which was established in 2002, has attracted over 40,000 foreigners from 131 countries, including 11,820 applications from greater China. According to the Malaysia’s Tourism Ministry, a total of 3,500 MM2H applications have been received up to August this year, versus 6,279 applications received in 2018. MyExpat, an agency that advises expatriates on Malaysia’s program, has also indicated a surge in the number of their Hong Kong clients looking into the program.
Up to 2018, the MM2H scheme has raked in RM40.6 billion in total and of that, property purchase makes up the highest amount at RM5.5 billion (approximately US$1.3 billion). Apartments, villas and townhouses topping the list.
Chmiel shared that the scheme which offers 10-year renewable visas to non-Malaysians and allows visa holders to buy residential property that cost more than RM1 million (approximately US$200,000).
The MM2H programme has made Malaysia the fifth Best Retirement Destination in the World for 2018, after Costa Rica, Mexico, Panama and Ecuador. Malaysia is the only top-five retirement destination located in Asia.
The investment news and data publisher, Investopedia.com, include Malaysia as the only ASEAN country in its list of the World’s Cheapest, Safest Retirement Countries.
Chmiel said, “This really puts Malaysia at the forefront when it comes to property investment. Malaysia is a great investment destination. I believe that if all parties jointly work together, we can promote Malaysia as a great investment destination. This will increase revenue in tourism, retail, and construction and boost overall economic growth,” said Chmiel.