Has Malaysia’s property market bottomed out?

malaysia-property-real-estate

Malaysia sits right in the middle of its Southeast Asian neighbors Singapore, Philippines, and Indonesia. The country has a diverse cultural background and has seen some exceptional economic growth for the last 50 years, since its independence from the United Kingdom. Unfortunately, the country’s growth has been faltering recently on the back of some major corruption scandals and poor economic management.

Malaysia’s property market remained strong amidst the country’s challenging economy. House prices have slowed and price index recorded a rise of 5.36% in Q3 2016 compared to the 7.35% price index in Q3 2015. Recently, affordable housing is gaining momentum due to financial woes and bank’s stricter lending standards.

House prices are the highest in Kuala Lumpur as the city is ranked second most livable city in Southeast Asia this year by consulting firm Mercer. A condo unit costs between US$167.22 to US$185.80 per square foot (sq. ft.). Larger condominium units have rental yields of 4.5% compared to the 8% yields two years ago. Bungalows gross rental yields dropped significantly at 2.5%.

Johor Bahru ranked third in Mercer’s annual survey and is an attractive location because it is near to Singapore. House prices in the area are around US$185.80 per sq. ft. with gross rental yields of 3.58%. Penang has become popular to tourists because of the abundant heritage sites in the area. Apartment prices in the area are around US$158.49 per sq. ft. with gross rental yields of 3.58%.

Experts claimed that foreign investors, especially those in Singapore, are expected to pour in the country to snatch the great bargains in various cities. A non-Malaysian may own an unlimited number of leasehold and freehold properties upon approval of the state. However, the government imposed stricter rules on foreign investment in Malaysia’s property market.

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