When local developments are mostly bought by foreigners, I think that is a huge worry. The reason is very simple. If a crisis were to happen, foreigners would quickly sell and move the capital back to their home country. Locals tend to provide much better support. In fact, we must learn from the late founding Prime Minister of Singapore, Lee Kuan Yew. He said in 2010, “If you ask people to defend all the big houses where the bosses live, and they live in harbours, I don’t think that’s tenable. So we decided from the very beginning that everybody must have a home, every family will have something to defend, and that home must be owner-owned, but they have to pay by instalments over 20, 25, even 30 years. And that home we developed over the years into their most valuable asset.” Today 80 percent of Singaporeans stay in HDB built flats. Full article of what he said and more in channelnewsasia here.
Fortunately, this is not the case in Malaysia where the total foreign purchase for properties remain low when compared to more advanced property markets like Melbourne in Australia. Here’s an earlier report. There are however some whispers of worry when it seems that the Chinese (China) were investing a lot in Malaysian properties. It’s not just the Chinese by the way but also many other foreign nationalities actually. One latest number from the Malaysian Finance Ministry was that as at 2016, total properties owned by foreigners are still lower than 1 percent per total property transactions every year. Here’s that full report. Since percentage wise it’s still healthy, let’s now move to that thought of whether or not these foreigners are buying for short term speculative purposes? Personally, I do not think foreigners look at the Malaysian property market for some short term speculation because we are a very small property market and secondly, even within ASEAN, we may not be the top 3 most attractive for potential property price appreciation. 😛
Now for some expert’s view about Chinese buyers and Malaysian property. According to Knight Frank Malaysia, the Chinese buyers for Malaysian properties are here for the long term. Its Asia-Pacific research Head Nicholas Holt said, “We have seen certain markets around the world targeted by the Chinese buyers for various reasons — diversification, second homes, children’s education, wealth preservation, etc. In certain places like Vancouver, Hong Kong, Sydney, Melbourne and London, these have been the markets where we can see a lot of Chinese investors.” Allan Sim, executive director of capital markets at Knight Frank Malaysia said that some of these buyers are coming “for the education of their children, so it is from a totally different point they look at Malaysia”. Sim added that some of the Chinese developers “can bring in big manufacturing firms, which are already starting to come into Malaysia, but we don’t give them credit on that”. It does look positive since all these are also supported by the One Belt, One Road initiative by China for Asia. Here’s that full report in propertyguru.com.my Yes, I do like Malaysian property market to continue growing slowly for the world buyers. Happy following.
written on 20 Feb 2018
Next suggested article: MRT 3 by Chinese / Japanese consortiums (build and finance), probably