Economy is a key factor that affects a country’s property market. In Asia, apart from the “Four Asian Tigers” (Hong Kong, Singapore, Korea and Taiwan), many other Southeast Asian countries have also demonstrated great growth in recent years but have been relatively ignored for property investments. Malaysia is an example of this as this country’s economic and property market shows great potential.

Source: Hong Kong Trade Development Council

Malaysia has 5 Major economic advantages, including:

1. Continued increase of the country’s Gross Domestic Product (GDP)

• Malaysia’s economy expanded by 5.8% year-on-year (YOY) in Q4 of 2014, after rising by 5.6% and 6.5% respectively in the previous two quarters.
• The services and mining sectors were the main drivers of economic expansion, growing 6.2% and 9.6% YOY respectively.

2. Trade surplus for the 17th consecutive year

• Malaysia’s exports expanded by 6.4% to US$234 billion in 2014, and imports edged up by 5.3% to US$209 billion during the same period.
• Exports of manufactured goods, accounting for about two-thirds of total exports, saw an expansion of 7.6% amid stronger sales of electrical and electronic products.
• With faster exports growth, Malaysia reported a trade surplus for the 17th consecutive year in 2014, amounting to US$25 billion.

3. The Government launched the Economic Transformation Program

• The Economic Transformation Program (ETP) launched in 2010 targets 12 National Key Economic Areas believed to have the greatest potential to boost overall economic growth, including palm oil cultivation, tourism, financial services and electronics industries.
• The ETP is a comprehensive economic plan to propel Malaysia’s economy to the rank of high income economies (with a per capita income of at least US$15,000) by 2020.

4. Encouragement of trade integration at the regional and global level

• Malaysia is a member of the World Trade Organization (WTO), and it adopts a liberal trade regime.
• Import tariffs, where applicable, are mostly imposed on an ad valorem basis. The average applied duty rate was 6% in 2013. For non-agricultural products, import duty ranges between 0%-50%, and about 65% of the non-agricultural imports were duty-free.
• Raw materials, machinery and essential foodstuffs are generally non-dutiable or subject to duties at lower rates.
• The trade regime has been progressively liberalized to encourage integration at the regional and global level.

5. The establishment of the ASEAN Economic Community

• Malaysia is a member of ASEAN and the country is committed to the ASEAN Common Effective Preferential Tariffs (CEPT). Malaysia also adopts the rotational chair of ASEAN in 2015, and is scheduled to roll out the ASEAN Economic Community by December 2015.
• Malaysia has continued to participate in various free trade arrangements (FTAs).

Source: Hong Kong Trade Development Council

As Malaysia benefited from the above five factors, the International Monetary Fund (IMF) expects the Malaysian economy to expand by 5.2% in 2015 and by 5% in 2016 respectively. According to sinchew.com.my, the average Malaysian property price in 2000 was approximately RM139,000 (approximately HKD$310,000), and grew to approximately RM277,000 (approximately HKD$620,000) in the first quarter of 2014.

Source：ExpatriateAdvisory.com

Apart from considering Malaysia’s capital, Kuala Lumpur, as a potential area for investment, other areas should not be neglected. In 2008, UNESCO declared Georgetown, Penang as a World Heritage site. Since then, property prices in Penang have been rising rapidly and has since attracted overseas developers to Penang for development of high-end projects.

In the past three years, the second-hand property prices in Penang have already increased by about 30%, some even by 50%. Investors have begun to notice the potential of Penang properties, hence in recent years, a large number of foreign investors have started to investment in Penang real estate. Additionally, the Malaysian government has launched the “Malaysia My Second Home” program, and have since attracted retirees to buy properties there.

Source：ExpatriateAdvisory.com

Apart from considering Malaysia’s capital, Kuala Lumpur, as a potential area for investment, other areas should not be neglected. In 2008, UNESCO declared Georgetown, Penang as a World Heritage site. Since then, property prices in Penang have been rising rapidly and has since attracted overseas developers to Penang for development of high-end projects.

In the past three years, the second-hand property prices in Penang have already increased by about 30%, some even by 50%. Investors have begun to notice the potential of Penang properties, hence in recent years, a large number of foreign investors have started to investment in Penang real estate. Additionally, the Malaysian government has launched the “Malaysia My Second Home” program, and have since attracted retirees to buy properties there.

Golden Emperor Properties is hosting a seminar about Penang property investments on 27 – 28 June 2015. The event will also showcase E&O’s exclusive 21-acre seafront project, Quayside. Come and join us to find out more. For more information or to RSVP, please visit http://goo.gl/G4157O.

Golden Emperor Properties will also hold a Malaysian retirement seminar on 27 – 28 June 2015. For more information or to RSVP, please visit http://goo.gl/db7xQp.