Malaysia could be an attractive investment opportunity in 2010

Rising demand and an improving economic outlook are likely to be key factors in attracting investors to Malaysia, it has been claimed.

A report from Malaysian Industrial Development Finance (MIDF) shows that these factors are likely to make property investment in the country an attractive proposition for many in the coming year.

But MIDF warned that the withdrawal of cheap credit, absence of attractive promotions and favourable regulations may have a detrimental effect in the long term.

"Sales demand for residential properties is expected to remain buoyant as investors continue to deem it as one of the more liquid hedging asset. Speculators are also taking advantage of the current market sentiment to lock-in on gains," they said.

A survey of key property developers in the region found that none of them were planning on slowing down the rate at which they were developing new property.

Earlier this month the Malaysian government decided to limit the reintroduction of capital gains tax to properties sold within five years of their purchase date, something that Malaysia's Property Investment Organisation claimed was indicative of its favourable view towards property investment.