Investment Factors in Malaysia

One of the major points to emphasize with investing in Malaysia is the autonomy of the country’s economy. Unlike many other growing economies, Malaysia relies on the private sector within the country and the competitiveness of the businesses in the private sector to drive the economy forwards. Malaysia also relies on tourism, like other economies, however its ability to withstand a decrease in demand of export products, and therefore resist a slowdown of the global economy makes it stand out from many of the other countries considered ripe for property investment.

Politically the country is stable and the government are not only promoting foreign ownership of property, but they are also focusing heavily in promoting property ownership by nationals.

To this end, the government has implemented several reforms with regards to legislation regulating foreign ownership of property recently, such as the simplification of the bureaucracy required to purchase land by foreign nationals. Property prices are still very low and have shown significant growth in recent years with even higher growth estimated in years to come. Early in 2007, the Prime Minister Abdullah Ahmad Badawi announced the removal of Capital Gains Tax on property sales after the 31st of March 2007, yet another reason to invest. As these changes all happened in late 2006, early 2007, the time is perfect to invest in the country.

Inflation in Malaysia is historically very low, below 2% for several years with the recent increase in petroleum products worldwide helping to raise inflation to almost 4%. The government stepped in and are now ensuring that inflation does not rise any further by restricting the price increase on petroleum products.

Risks Assessment
When assessing the risks of investing in property overseas it is important to recognise the sales potential of your property and plan an appropriate exit strategy. As in every country, there are three basic markets available when it comes to selling real estate investments, which are the permanent, temporary and transitory residence markets. The permanent market are the inhabitants of the country, both local and foreign citizens who are considered permanent residents. The temporary market is made up of holiday home owners, both in Malaysia and abroad. The transitory residence market is composed of tenants who rent property from other property owners.

As always with real estate investments, patience and holding on until the perfect time to sell is an absolute necessity to reap maximum returns on your investment

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