- Property For Sale
Economies and housing markets around the world are still recovering from the financial crash, but it's a different story in Malaysia, where the country's real estate market hit a five-year high. The number of residential property transactions in Malaysia surged by 18.9 per cent in 2011, according to the National Property Information Centre, the highest level since 2007.
Photo credit: PNP!
Economies and housing markets around the world are still recovering from the financial crash, but it's a different story in Malaysia, where the country's real estate market hit a five-year high.
The number of residential property transactions in Malaysia surged by 18.9 per cent in 2011, according to the National Property Information Centre, the highest level since 2007. The total value of the country's real estate sales also increased, with the average transaction value jumping by 22.1 per cent to RM61.83 billion.
Penang stole the show, experiencing an exceptional growth of 68.2 per cent in transactions, ahead of Johor's increase of 15.7 per cent and Kuala Lumpur's 14.4 per cent. Indeed, the North-Western state was recently praised for its strong performance at the Malaysia property Exposition by the Chairman of the Real Estate and Housing Developers Association, Datuk Jerry Chan Fook Sing.
"Astute local and foreign real estate investors have complemented Penang's progress in offering not just some of the most attractive product designs, but developments at attractive prices," commented Sing.
Attractive is the operative word for locals, too, as one of the region's agents, Henry Butcher, proposed that prices were the key to Penang's popularity. The company highlighted the importance of "recession proof" properties in the "medium price bracket", according to Property Showrooms, as well as the strong demand for homes valued under RM400,000.
The national figures confirm the demand for affordable Malaysian property, with house prices below RM150,000 accounting for 54 per cent of all sales in 2011. But investors liked the look of luxury properties too, reports OPP, with properties worth over RM500,000 generating 21,905 transactions last year - up from 16,782 in 2010.
Deputy Finance Minister Datuk Donald Lim commented on Malaysia's remarkable 12 months: "This could be attributed to the increase in affordability level and supported by the ease in borrowing as well as attractive loan packages offered by financial institution. Last year, in terms of construction activities, the higher number of new unit starts and building plan approvals signified the confidence of developers and investors."
But while buyers enjoy the Malaysian boom, others are concerned by the rocketing levels of interest, which followed a 13 per cent increase in house prices in 2010. A further rise of 7 per cent in the final quarter of 2011 has prompted government fears of a housing bubble.
In an attempt to moderate the market, Bank Negara Malaysia has since restricted lending for applicants taking out a third mortgage to buy a home. But investors are still flocking to Malaysia and buyers from the Middle East and China are leading the rush, sending mortgage application figures up even further.
As a result, Malaysia's government is now considering doubling the base price of houses purchased by foreigners from RM500,000 to RM1 million.
"From what I understand, these revised guidelines have been discussed at the ministerial level and should this be enforced, it will mean that foreigners will only be allowed to buy properties priced above RM1 million," a source told Home Guru.
As the government promises "strict measures" to avoid a subprime mortgage crisis, will foreign buyers be spurred on by the imminent threat of higher minimum investments?