Chinese investors driving force for Malaysian residential property market, report says

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Despite some reservations about the scale of foreign property investment in Malaysia, much of which is from China, or even outright buying bans on particular projects imposed by the new government elected last year, interest in real estate by Chinese investors remains high, a new report says.

Mainland Chinese buyers accounted for $2 billion worth of property sales in 2018, which is 12.1 per cent of the total transaction value, according to a study by Chinese international property portal Juwai.com and Malaysian real estate agency network, IQI Global.

The report said those buyers triggered a significant multiplier effect as the impact of their investment spread to other sectors, such as retail, hospitality, manufacturing, banking, insurance and transportation. Furthermore, some 37,800 Malaysian and foreign workers are employed in residential building construction destined for buyers from China.

Multiplying effect on economy and employment

The total positive impact of Mainland Chinese residential property buyers on the Malaysian economy and employment is probably several multiples greater, the report noted.

“There is a real debate in Malaysia about whether foreign investment is good or bad for the country. We wanted to find out for sure, so we put our researchers on the task. It turns out that foreign property buyers have a positive economic impact that goes well beyond the purchase price they pay and also well beyond the related taxes and fees,” said IQI Global CEO Kashif Ansari.

He noted that Malaysia was not the only country that is vigorously debating the benefits of foreign real estate buyers.

“What makes Malaysia special is that it has a very vigorous and effective regime of policies that direct foreign buying into those parts of the property market that most benefit the country. In the US, for example, there are virtually no restrictions on offshore buyers,” Ansari said, adding that this meant “the government of Malaysia has much more control over foreign property buyers than do the governments of the US and many other countries.”

Malaysia fifth most popular country for Chinese property buying inquiries in the world

According to Juwai.com executive chairman Georg Chmiel, Mainland Chinese made 16.5 per cent more inquiries on Malaysian property in the third quarter of this year than in the same quarter of 2018.

He said buying inquiries had declined from their peak in the first quarter of this year but remained above the average level in 2018.

“In the first half of 2019, Malaysia was the fifth most popular country for Chinese property buying inquiries in the world,” Chmiel said, adding that Malaysia ranked behind Thailand, Japan, Australia and Canada.

Chinese buyers generally prefer newly built homes rather than second-hand or resale property, the report found, adding that currently, more than $1 billion worth of new residential building construction in Malaysia is targeted at foreign and Chinese investors.

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Despite some reservations about the scale of foreign property investment in Malaysia, much of which is from China, or even outright buying bans on particular projects imposed by the new government elected last year, interest in real estate by Chinese investors remains high, a new report says. Mainland Chinese buyers accounted for $2 billion worth of property sales in 2018, which is 12.1 per cent of the total transaction value, according to a study by Chinese international property portal Juwai.com and Malaysian real estate agency network, IQI Global. The report said those buyers triggered a significant multiplier effect as the...

Auto Draft

Despite some reservations about the scale of foreign property investment in Malaysia, much of which is from China, or even outright buying bans on particular projects imposed by the new government elected last year, interest in real estate by Chinese investors remains high, a new report says.

Mainland Chinese buyers accounted for $2 billion worth of property sales in 2018, which is 12.1 per cent of the total transaction value, according to a study by Chinese international property portal Juwai.com and Malaysian real estate agency network, IQI Global.

The report said those buyers triggered a significant multiplier effect as the impact of their investment spread to other sectors, such as retail, hospitality, manufacturing, banking, insurance and transportation. Furthermore, some 37,800 Malaysian and foreign workers are employed in residential building construction destined for buyers from China.

Multiplying effect on economy and employment

The total positive impact of Mainland Chinese residential property buyers on the Malaysian economy and employment is probably several multiples greater, the report noted.

“There is a real debate in Malaysia about whether foreign investment is good or bad for the country. We wanted to find out for sure, so we put our researchers on the task. It turns out that foreign property buyers have a positive economic impact that goes well beyond the purchase price they pay and also well beyond the related taxes and fees,” said IQI Global CEO Kashif Ansari.

He noted that Malaysia was not the only country that is vigorously debating the benefits of foreign real estate buyers.

“What makes Malaysia special is that it has a very vigorous and effective regime of policies that direct foreign buying into those parts of the property market that most benefit the country. In the US, for example, there are virtually no restrictions on offshore buyers,” Ansari said, adding that this meant “the government of Malaysia has much more control over foreign property buyers than do the governments of the US and many other countries.”

Malaysia fifth most popular country for Chinese property buying inquiries in the world

According to Juwai.com executive chairman Georg Chmiel, Mainland Chinese made 16.5 per cent more inquiries on Malaysian property in the third quarter of this year than in the same quarter of 2018.

He said buying inquiries had declined from their peak in the first quarter of this year but remained above the average level in 2018.

“In the first half of 2019, Malaysia was the fifth most popular country for Chinese property buying inquiries in the world,” Chmiel said, adding that Malaysia ranked behind Thailand, Japan, Australia and Canada.

Chinese buyers generally prefer newly built homes rather than second-hand or resale property, the report found, adding that currently, more than $1 billion worth of new residential building construction in Malaysia is targeted at foreign and Chinese investors.

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