KUALA LUMPUR: Malaysia remains a destination for real estate investment for Chinese investors as the slowdown in the republic’s property market is leading to an increase in Chinese investment in overseas properties, especially in South-East Asia.
Juwai IQI said in a report that many Chinese buyers believe Malaysia’s property market will recover from its current weakness in the coming year and they will be rewarded for their investments.
The Asian real estate technology group noted that Malaysia’s economy is recovering rapidly from the pandemic, with forecast full-year 2022 gross domestic product growth of 5.5%.
“Malaysia is geographically proximate, affordable and offers an appealing lifestyle to buyers from China, especially the colder north.
“Malaysia’s new premium visa programme (PViP) opens the door to wealthy migrants who wish to reside and work in the country.
“It is the latest move towards transforming the emphasis of Malaysia’s immigration policy from quantity to quality,” it said in the report entitled “China Property Slowdown Drives South-East Asia Property Investment,” Bernama reported.
Juwai IQI believes the new visa programme will succeed in attracting close to its target of 1,000 participants in the first year.
“The conditions are not demanding and the benefits of living in Malaysia on a long-term visa are very attractive.
“Foreigners want to be able to live and work here, send their children to local international schools and not have to worry about renewing their visas every six or 12 months,” it said.
It noted that the conditions for residency under the PViP included an income of RM40,000 per month, a RM1mil deposit in a Malaysian bank and an upfront participation fee of RM200,000 per applicant and RM100,000 per dependent.
The visa is valid for 20 years, although renewals are required every five years.
The top nationalities participating in the PViP will include Japanese and other Asian nationalities, then Europeans, North Americans and people from the Middle East.
On the South-East Asian level, besides Malaysia, other top property investments by the Chinese are Thailand and Vietnam.
“We believe China will maintain zero-Covid through at least the first quarter of 2023 and will not likely fully reopen until at least the third quarter of 2023,” it added.
According to data by the National Property Information Centre (Napic), more than 188,000 property transactions worth RM84.4bil were recorded in the first half of 2022 (1H22), reflecting an increase of more than 30% in volume and value compared to the same period last year as all sub-sectors recorded year-on-year (y-o-y) growth.
The residential property sector recorded 116,178 transactions worth RM45.62bil in the period under review, increasing by 26.3% in volume and 32.2% in value y-o-y.
The four major states, namely Penang, Kuala Lumpur, Johor and Selangor, absorbed about 47% of the total national residential volume, said Napic.
Napic also reported that more than 10,000 units of newly launched residences were recorded in 1H22, down by 66.7% y-o-y.
Compared with 2H21, the new launches were lower by 13.3%.
Terraced houses dominated the new launches, contributing 68.2% of the total, it said.
The sales performance for new launches in 1H22 was recorded at 20.3%, slightly lower compared with 20.6% in 1H21 and 28.1% in 2H21.
On property overhang, Napic said the situation had improved amid the market recovery.
A total of 34,092 overhang units worth RM21.73bil was recorded, down by 7.5% and 4.6% in volume and value, respectively, against 2H21.
Most of the overhang is in Johor with 6,040 units worth RM4.73bil, it said.