Property prices are certainly on the rise and PPC International Sdn Bhd chief executive Siva Shanker told Business Week values in the main cities will increase by ten per cent in 2013. Tighter controls on finance are helping to keep growth in check, however. This means the risk of a property bubble is low, adding relative stability to the market. Bank Negra Malaysia's recent decision to introduce maximum tenures for mortgage finance has helped with this. Finance for residential and non-residential properties will have a maximum tenure of 35 years, while finance extensions for personal use will increase to a maximum period of ten years. Pre-approved personal financial products have also been banned.
Meanwhile, Singaporean buyers are helping to drive price rises and Malaysia continues to attract investors from the region due to its proximity and cultural similarities. "A lot of Singaporeans buy their second home or investment properties here," Mr Tan said. What's more, property prices in Singapore have undergone corrections in recent years, while in areas like Kuala Lumpur, they have been constantly rising since 2004.
However, Seulyn Wong, a property investment strategist at Ironfish Australia, explained to the Borneo Post that people still need to be cautious. Developments in political and economic sectors in Malaysia, both regionally and nationally, will have an impact on the health of property. Foreign investors should therefore always do their research about the climate.