Press Release Juwai.com Calls for Reviews on Foreign Property Investment As Demand For Malaysian Property Increases from Hong Kong
According to buyer enquiry trends from Juwai.com, the No. 1 Chinese international real estate portal, there has been a steady increase in demand from Hong Kong-based buyers wanting to invest in property in Malaysia even as demand from China remains strong.
Juwai.com Executive Chairman Georg Chmiel said: “Malaysia was already the number-one destination for buyers from Hong Kong in 2018. With the Malaysia My Second Home Program (MM2H), affordable standard of living, high quality of life, medical facilities and accessible educational institutions, Malaysia is especially appealing to those who wish to leave Hong Kong. Our team is fielding more enquiries from Hong Kong buyers looking at Malaysia.”
“Hong Kongers are a wealthy group of buyers eager to seek out opportunities across Asia as they have for decades. However, the delay in approvals on the scheme could create a hindrance in applications.”
He added that while the MM2H is a great programme, the delay in clearing the visa applications and the lack of information on when the new applications would be approved is needs to be significantly improved.
“We hope that with the upcoming Budget 2020, set to be announced in October, the government will look into reviewing the scheme to make it more appealing so that it can contribute to Malaysia’s international image and its future economic growth.”
“The surge in buyers from Hong Kong shows Malaysia’s great appeal. Buyers from greater China can support the Malaysian property sector and all the jobs that depend on it.
“Malaysia is a great investment destination, yet fewer than 3 per cent of Malaysian properties are owned by foreign buyers. There is great potential to lure more investors and residents to grow the economy and ease the current glut in the property sector,” he added.
“Official Hong Kong government data shows that the number of locals seeking police checks has surged by 48%,” said Chmiel. “These ‘good citizenship’ documents certifying that they do not have a criminal record are crucial to enable them to apply for the Malaysia My Second Home Program and other foreign visas. Applications increased 12% in June, 41% in July, and 48% in the first two weeks of August.
“This is evidence that many Hong Kongers truly are seeking to move to Malaysia for work or education. This will inevitably create new economic ties between Malaysia and greater China. The data doesn’t show with certainty that people are applying for these police checks for their foreign visa applications, nor specifically that all are applying for visas in Malaysia. It is rare, however, to seek these documents for any other purpose, and Malaysia is the top destination for Hong Kong buyers.”
THE PULL FACTORS AND AREAS OF INTEREST
The top searched areas for mainland and Hong Kong Chinese property buyers are Kuala Lumpur, Penang and Johor Bahru. The main intention to purchase was primarily for investment and retirement.
“Malaysia is an attractive investment destination. The Malaysia My Second Home Scheme (MM2H), and friendly foreign investment policies has made Malaysia a great choice. Language is no barrier as Malaysians also speak English, Cantonese and Mandarin. The political stability, freedom from natural disasters, and great education and medical facilities are also key selling points. Malaysian properties are much larger than what’s available in Hong Kong and cost a fraction of the price, “ shared Chmiel.
“The median cost for a house in the state of Johor is RM350,000 (US$84,000). A 300 sq ft apartment in Hong Kong, despite being much smaller than the average flat in Malaysia, would cost six times more.”
The Global Real Estate Bubble Index for 2018 has revealed that Hong Kong had the world’s most overvalued housing sector.
“According to social policing group, Demographia, a study which compares average household income with average house prices has shown that Hong Kong has the world’s least affordable property market for the past nine years. Hong Kong’s housing shortage is also problematic, buoying sky-high prices and pushing Hong Kong residents to seek properties overseas,” said Chmiel.
Data from Hong Kong real estate agency Centaline shows that residential property prices in that city have rocketed by more than 200 per cent over the past decade.
THE LURE OF THE MALAYSIA MY SECOND HOME SCHEME (MM2H)
The Malaysia My Second Home Program programme, which was established in 2002, has attracted over 40,000 foreigners from 131 countries, including 11,820 applications from greater China. According to the Malaysia’s Tourism Ministry, a total of 3,500 MM2H applications have been received up to August this year, versus 6,279 applications received in 2018.
MyExpat, an agency that advises expatriates on Malaysia’s programme, has also indicated a surge in the number of their Hong Kong clients looking into the programme.
Up to 2018, the MM2H scheme has raked in RM40.6 billion in total and of that, property purchase makes up the highest amount at RM5.5 billion. Apartments, villas and townhouses topping the list.
Chmiel shared that the scheme which offers 10-year renewable visas to non-Malaysians and allows visa holders to buy residential property that cost more than RM1 million.
The MM2H programme has made Malaysia the fifth Best Retirement Destination in the World for 2018, after Costa Rica, Mexico, Panama and Ecuador. Malaysia is the only top-five retirement destination located in Asia.
The investment news and data publisher, Investopedia.com, includes Malaysia as the only ASEAN country in its list of the World’s Cheapest, Safest Retirement Countries.
Chmiel said, “This really puts Malaysia at the forefront when it comes to property investment. Malaysia is a great investment destination. I believe that if all parties jointly works together, we can promote Malaysia as a great investment destination. This will increase revenue in tourism, retail, and construction and boost overall economic growth,” said Chmiel.
— end of press release —
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