Private investment capital is expected to increase
By Roxanne James

Foreign Investors Power Malaysian Real Estate

Property investors are being alerted to improving stability in Malaysia, creating excellent opportunities to capitalise on predicted growth.

According to central bank Negara Malaysia, the economy is projected to see expansion of between 4.5% and 5.5% this year, driven by domestic demand and increased foreign investment.

Private investment capital is expected to increase 9% in 2015, led by investment in the manufacturing sector and the Malaysian real estate market.

Investment inflows from overseas, notably China, have continued to pour into Malaysia in recent years transforming the country into an international marketplace with broad appeal.

Malaysian real estate firms have stepped up activity beyond their borders, setting up offices in Shanghai, Chengdu, Hong Kong and Singapore to encourage further Asian investment in its commercial and residential property.

The Malaysian government has implemented fiscal reforms to consolidate its economic position, with the restructuring resulting in a more diversified economic structure.

Reform measures have reduced Malaysia's dependency on oil revenue and encouraged investment activity in other sectors, stimulating sustainable growth across its economy. The central bank predicts 8.4% growth in manufacturing exports, led by electrical and electronics growth of 14.1%, with industry benefitting from improvement in major advanced economies.

In terms of property investment, domestic rental demand in Malaysia is considerable and expected to grow, particularly in regional business and manufacturing districts. Affordability remains an issue for Malaysia's younger demographic although unemployment levels are low at around 3% nationally, resulting in a buoyant demand for rented housing.

For investors looking for a second-home or holiday-home investment, there are plenty of tourist resorts where high-quality real estate is available at low cost. Typical expat locations such as Kuala Lumpur and Penang are always in demand with short-term renters, enabling investors to enjoy a revenue stream when they don't require the property themselves.

Malaysia has one of the most robust economies in Asia, reflected in the consistently high standard of living available to locals and expats alike. According to International Living, Malaysia is the fourth most popular retirement destination due to the low cost of living, meaning pensioners get more bang for their buck.

With a good mix of economic expansion and increased investor appetite for Malaysian real estate, the fundamentals of this market look rock-steady, presenting many opportunities for high-yielding property investment.

 

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