Singapore Expats

With horrific rent yields in Singapore I'm wondering if there are any other real estate investors here with an eye on Malaysia? Foreigners can own most properties free and clear so long as the sales price exceeds 1 million ringgit.

Let's get a discussion going! What cities/areas are you looking at?

Read and consider the 'Art of War'. Pick to fight your battles only upon the territory with which you're most familiar. The flipside is, that investing in a product/region with which you're unfamilar puts you at an immediate disadvantage.

AllBiz wrote:With horrific rent yields in Singapore I'm wondering if there are any other real estate investors here with an eye on Malaysia? Foreigners can own most properties free and clear so long as the sales price exceeds 1 million ringgit.

Let's get a discussion going! What cities/areas are you looking at?

well... i had SOME luck with industrial and agricultural land in JB. wouldn't do it again. ever.

With increasingly shrill Islamic extremists trying to turn Malaysia into a theocracy, I don't see the country as being stable enough to warrant any kind of long term investment.

Yes, companies are moving their service operations into Malaysia but they can just a quickly move them back out. Who knows what will happen to your investment?

House prices in Malaysia continue to rise, albeit at a slower pace following anti-speculation measures.
In the first quarter of 2014, Malaysia’s nationwide house prices rose by 8% (4.35% inflation-adjusted) from the same period last year, to MYR276,668 (US$86,027), the lowest year-on-year growth since Q4 2010, based on figures from the Valuation and property Services Department (JPPH). In a quarterly basis, house prices increased 1.65% (0.73% inflation-adjusted) in Q1 2014.

This is a country that had strict currency controls up until a few years ago. This is a country that has endless issues with title security. This is a country that has countless projects (off the plan) fail with no recompense to the investors. This is a country that has a deliberately racist constitution. This is a country that ranks poor;y on the world corruption index. This is a country that has had an entire condo fall over because of deforestation and erosion.

Ignoring the very real risk that it may become the next ISIS hotbed, tell me again why you want to put money there?

^^This!

I have friends that live there and work in SG. They all love the lifestyle despite the commute. But telling is the fact that not one of them has bought anything, they all rent. Next time I see them I must ask why that is.

Compared to Sg the prices are reasonable and if you live there it would seem like buying would be a good idea. At least looking from the outside.

if the only factor you're considering about investing in Malaysia amount of the capital invested, I would say go for it. The same applies to if you want to invest in Indonesia. But the problem is you have to consider a lot more things than just the money , e.g. possible renter and the rental yield, political stability, economic condition etc. When you factor in these things, it doesn't seem that "easy" anymore. Also property investment involve bigger cost when your property is vacant for a period of time. :S. Singapore's rent afaik has been lower than other countries but is more stable in terms of getting tenants, political security and currency. at least the SGD is getting stronger.

I'll rent off you if the property suits

I prefer investing in Australia. Some countries does not have suitable investment climate to safeguard investors money.

If you do invest in Malaysia now, go for completed landed properties in the mid-tier price range of RM300,000 to RM700,000. While the rental yield may be as great as condos, easier to realise and higher capital appreciation.

However the capital gains now were not as lucrative as it used to be. A property I bought in 2009 at 350K sold at 800K in 2013, while a property I bought in 2011 at 700K sold at 1,050K in 2014.

The returns may seem great but you there are ALOT OF CONSIDERATIONS before you do anything. I can provide you will all the details on the risks of investing in Malaysia having previously played in the market for so long.

I am thinking of doing cambodia now.........anyone with ideas?

livingontheedge wrote:If you do invest in Malaysia now, go for completed landed properties in the mid-tier price range of RM300,000 to RM700,000. While the rental yield may be as great as condos, easier to realise and higher capital appreciation.

However the capital gains now were not as lucrative as it used to be. A property I bought in 2009 at 350K sold at 800K in 2013, while a property I bought in 2011 at 700K sold at 1,050K in 2014.

The returns may seem great but you there are ALOT OF CONSIDERATIONS before you do anything. I can provide you will all the details on the risks of investing in Malaysia having previously played in the market for so long.

I am thinking of doing cambodia now.........anyone with ideas?

I understand that foreign investors can only buy properties in Malaysia priced at RM$1 million and above. In Selangor the minimum price is RM$2 million.

Yep that is the case for foreigners. I just realised a typo in my post - rental yields for landed are not as good as condos. However with the increasing vacany rates across KL and Selangor for condos and sohos, the rental yields are coming down dramatically. A condo I bought in Ampang Hilir, KL, on the assumption I would obtain 8% rental yield based on market rates - 3 years later, upon completion, the rental yield for the area is now at 4.5%, with some landlords even going down to 4%.

livingontheedge wrote:A condo I bought in Ampang Hilir, KL, on the assumption I would obtain 8% rental yield based on market rates - 3 years later, upon completion, the rental yield for the area is now at 4.5%, with some landlords even going down to 4%.

IME this is one of the big dangers of buying an investment property off-plan, especially in large developments. When it completes/TOPs you have to compete against all the other investors to get a tenant. It can become a race to the bottom if there are many landlords paying mortgages and receiving no rent. This potential scenario is too unpredictable for me to have invested in new-build.

If you buy an already existing property, and choose it well, the future lettability and income-stream is generally considerably more predictable, not least that you can establish the value and likely rental yield% much more accurately. I realise you don't get the opportunity to lock-in a future purchase 2-3yrs hence, with perhaps only a small deposit paid, with the parallel promise of capital returns... but it's only a promise, and it's then speculation rather than investment.

p.s. And when you have landlords in big developments who can't let their units, and some go bankrupt, then you have can fire-sales (i.e. sell at any price) of those units. Then the capital values of the whole development get impacted.... nope, not for me.