What Do Foreigners Love Most About Malaysia?
Located in two separate regions in the South China Sea, Malaysia is a small country with a fast-growing economy. Once a British colony, the country is home to more than 30 million people, many of whom live in or near the capital city of Kuala Lumpur. In its new report, entitled “Doing Business 2019 : Training for Reform”, the World Bank has found that Malaysia ranks third out of all the countries in Asia (The World Bank, 2019). Malaysia is continuously on its track of economy transformation to provide a better place of investment welcoming foreigners. The transformation has become a gravitational force that attracts more and more expatriates consider investing in Malaysian properties.
Other attractive socioeconomic advantages of Malaysia:
- A.T. Kearney has ranked Malaysia in the third place after India and China in the 2019 Global Services Location Index (GSLI) for off shoring destination of choice.
- Malaysia maintains low unemployment rate of less than 3% yearly with the inflation rate at average 2.5%. Living cost is relatively low in the region.
- Malaysia experiences increasing visitor arrivals for 2019 – Top 10th Tourist Destination in the World.
- A place of peaceful living free from major natural disasters such as volcanoes, floods, tsunami and earthquakes.
- Harmonious multicultural society.
- English language is widely used thus it is easy to communicate with locals.
- Malaysia is ranked 1st Best Place to Retire by International Living Inc. in 2019 for its retirement residency program within Asia – Malaysia My Second Home program (MM2H).
- Easy and affordable connectivity to other countries with well-developed infrastructure of airports, highways and seaports.
- Private hospitals and health care system attracting foreigners for quality services with world-class healthcare facilities.
- Easy access to Halal food for Muslim community.
Why do foreigners invest in Malaysian property?
In terms of property market, Malaysia property prices are still among the cheapest in Asia with good growth amidst a resilient economy. Regional property markets like Hong Kong and Singapore have actually risen too much in the past few years and are now taking a breather, as shown by the Regional 1- and 5-year House Price Changes below. This has deterred the appetite of foreign investors in the two popular Asian cities.
On the other hand, Malaysian property offers stable rental yield between 4% to 5% per annum for the last 2 years. On average, Malaysian rental return takes only 16 years, which is one of the better returns as compared to other countries in the region.
Source of data: National Property Information Center (NAPIC)
The local demand for property by Malaysians is huge with up-graders and young families getting richer. The fundamentals driving the property market’s growth in recent years have not changed where the younger population is still leading to new household formation, a rising middle-income group and stable employment in Malaysia. The majority of 93% of the total properties investment in Malaysia are still by the local Malaysians, and only 3% are from the foreigners. Thus, Malaysia’s property price index has been steady over the years despite constant hiccups of world crisis due to steadily increasing demand for properties. The local demand fuels the wealth and prosperity growth over the years in Malaysia.
COMPARISON AMONG SEA COUNTRIES
|Best Countries Ranking (usnews.com)|
|Respect Property Rights||0.6||3.3||0.5||0.2||0.2|
|Culturally significant in terms of entertainment||2.5||2.6||1.5||6.8||1.3|
|Transparent business practices||0.7||4.5||0.7||0.5||0.6|
|Skilled labour force||1.5||5.9||1.3||2.0||2.0|
|Connected to the rest of the world||3.2||7.8||1.8||3.6||1.0|
|Well-developed legal framework||0.3||3.5||0.3||0.2||0.1|
|Many cultural attractions||3.9||3.9||4.6||8.5||4.7|
|Has great food||4.3||3.5||3.5||8.9||6.3|
|Open for Business Ranking|
|Favourable tax environment||2.4||3.5||1.3||2.8||2.0|
|Transparent government practices||0.4||2.4||0.4||0.1||0.1|
|Cheap manufacturing costs||9.3||4.9||9.7||9.8||9.9|
|Quality of Life|
|A good job market||2.1||6.7||1.1||2.0||2.2|
|Well-developed public education system||0.5||5.5||0.3||0.3||0.2|
|Well-developed public health system||0.5||4.0||0.1||0.2||0.2|
|House Price Changes (globalpropertyguide.com)|
|Square Metre Prices in Asia (globalpropertyguide.com)|
|Square metre prices, premier city centre||$3441||$14373||$2595||$5266||$2280|
|Best Retirement (internationalliving.com)|
|Best Healthcare in the World (internationalliving.com)|
|World’s Best Countries To Invest In Or Do Business For 2019 (ceoworld.biz)|
|2019 Global Services Location Index (GSLI) for off shoring destination of choice (atkearney.com)|
|Most visited cities/countries around the world in 2019 (businessinsider.my)|
|World’s largest ranking of countries and regions by English skills (ef.com)|
|Index of Economic Freedom 2019 (heritage.org)|