Why Foreigners Are Attracted to Purchase Malaysian Real Estate

There are a lot of great news for many who are interested in property in Malaysia. Especially for Penang apartment rentals, condominiums, and other forms of housing in that area and other areas in Malaysia, there are great benefits aboard.

Property in Malaysia is really in demand, and even though they have laws that are more landlord favorable, they still extend a lot more favor towards the tenants. So rather locals or foreigners looking to buy, sell, rent, or invest in property in this wonderful country, the benefits are abounding from tax breaks to getting more for your money.

There are great tax breaks available for the “Malaysia My Second Home”(MM2H) program. In this program, MM2H participants have visas, and can purchase property that is at least RM500,000 in Penang, but it’s limited to only two units. However, in other areas within Malaysia, foreigners don’t have limitations in purchasing limits, and the minimum amount for this program in those areas must be at least RM2 million for some, and RM1 million for others.

Another thing about some tax benefits include something that may not seem so beneficial at first, but it will be beneficial in the long run. Starting in the fall of 2012, there have been proposals to increase property gains taxes for the first few years. Starting in January 2013, the tax rate from the third to the fifth year has changed from 5 to 10%; however, no tax will be imposed after ownership of six years or more. Another thing that you should be aware of is that 15% will be charged to you if you sell the property within the first two years of purchasing it.

Besides these not so perfect occurrences, owning property in Malaysia is one of the most popular destinations in the world. Additionally, these changes are minor compared to the whole process and benefits of their properties.

Malaysia is thriving, and with that in mind, you can take full advantage of what they have to offer within the real estate market. This can be done by performing thorough research with well reputable companies who can assist you in getting the best. Also, keeping abreast of the new and updated regulations will help you go a long way within the market.

Searching for Penang Property? Here Are Some Helpful Advice for Foreign Investors

Investors throughout the world are looking at investing in Malaysia properties for a multitude of reasons.

You will find that doing business in Malaysia is easier compared to other states with Malaysia coming in 6th place by the World Bank in Ease of Doing Business Report 2014.

You will also be avoiding any natural disasters which makes it a great target for investors and for people in the region looking to settle down in a coastal area.

Penang it’s self is located on the Northwest coast and you should know it’s broken up into two different areas the Penang Island and the Seberang Perai which is on the mainland. Penang is actually the second smallest state of Malaysia after Perlis. Penang is known for its tropical climate with temperatures ranging from 23 degree to 32 degrees Celsius.

Lacking in size has not slowed Penangs development. The beach fronts and islands have become a spot for tourism and housing growth. One must take a drive on the Penang Bridge which connects the main land and Penang Island which until recently was the only driving option to the island. With the boom in Penang at this time The Second Penang Bridge was just opened on March 1st, 2014 connecting the southern part of the island.

You will also find now is the time to do seriously consider a search for Penang properties. Just in 2014 the Malaysian government raised the requirements for purchasing a Malaysia property from MYR500,000 per unit to MYR1 million per unit. You will find that the MM2H migration program has had no changes but is something to look out for in the near future.

Penang has a few popular areas to live in but a couple to check out are Penang Hill, Minden Heights along with Jelutong. You will find in these area’s plenty of larger condos available with many new buildings been put up at this time. The high rise condominiums are become popular for their spectacular sea views. During a search you will also find many terraced homes and partial detached houses for those looking for more private quarters.

With European and Asian investors flocking to Malaysia don’t wait to find out if Penang and Malaysia is for you.

The Famous Gurney Drive of Penang

Gurney Drive otherwise called The New Esplanade is a lovely seaside promenade on the island of Penang, Malaysia.  Really, Gurney drive is more reputed for its popular hawker centre even before its beautiful esplanade area!  Some of the most upscale and modern residential Penang properties are located along this premium waterfront area! 

If you are posted to Penang and if you like to be in touch with nature without being too far from the city, Gurney Drive is definitely a place to consider.  There are quite a number of sea view condominiums with modern facilities such as swimming pools, gyms, play area for children, sauna, 24-hour security and the likes.  Should you be looking for a Penang apartment, there is a good choice of apartments and condominium blocks along the Gurney Drive such as 11 Gurney Drive, Gurney Park Condominium and The Regency to name a few.  The best part of living in these apartments is to be able to walk down the promenade with the cool sea breeze against your face in the evenings.

 Gurney Plaza is one of Penang’s most popular shopping malls and is located along the Gurney Drive.  The shopping plaza has everything you could ever need under one roof and takes care of all shopping needs from food to fashion and not to mention movies!  You can happily do a lot of window shopping in the Gurney Plaza during the hot sultry afternoons and walk down the promenade for an evening bite and a stroll!  Personally I think living in Gurney Drive is a classic case having your pudding and eating it too!

Low Cost Homes for Penangites

The Penang State Government has created a web site for the online registration of homes, and includes good information on Citizen Housing Project (PPR), low cost and medium low cost homes, with application status checks.

There are still a number of such affordable homes in Penang, given that the governmetn has set the regulation for developers to build the homes near to their intended expensive homes projects, and also the effort of Penang Development Corporation (PDC). The criteria of selection is based on a computerised system, with marking system taking into consideration some factors including the place of birth, marital status, dependents, the period of time for application, how long the applicant stayed in Penang, ex-military, the current residential status, the reason of losing a residence, occupation and rejection.

Priority is given to those with at least 5 dependents, and special considerations for those with disabled spouses, single parent or widows of ex-military servicemen.

Applications for the Citizen Housing Project should adhere to several rules and regulations, and applicants must be Malaysian citizens staying in Penang. The combined income should be lesser than RM1,500 per month, with the single earning spouse’s monthly income of no more than RM750.00. They should not have owned a home before too, and if they did, it will disqualify them even though they may have sold the house. Usually these homes are rented, rather than sold, with rentals as low as RM100 a month. Applicants are subject to an interview when all paperwork reviews had been qualified. Only upon the success of the interview that the applicant can really be able to rent a designated unit specified by the government under this scheme.

For low cost homes, the combined household income should be no more than RM2,500 and no more than RM3,500 for those opting the medium low cost homes. Again, the couple should not have owned a home before, and they will be disqualified even if they sold their previous home.

The user friendly portal also offers information on the current active projects that the applicants may apply. Projects are categorised by location, and includes both Penang island and Province Wellesley. The homes are usually below RM80,000, and may only go as high as RM75,000 for medium low cost homes.

At present, there is a total of 50 projects listed on the government website.

Make a Penang Property a Good Investment

Penang is a small part of Malaysia. It is a small state in the northwest coast of Malaysia but it is one of the most populous areas in the said country. The greater metropolitan area of Malaysia consists of the Penang Island, Sungai Petani, Kulim and Seberang Prai. These areas are the most populous. In these places are where you would also find the facilities and establishments such as schools and universities, stores and malls, and recreational establishments that people want to have a convenient living. If you are planning to invest for a property in Penang, you would surely succeed and make a lot of profits if you know some tricks on how to make a Penang property a good investment.

First, you should choose the type of real estate property that you would buy. Some of the Penang properties you would find are land, residential properties and commercial establishments. If you would buy a land in Penang, you would have a lot of options on what kind of building you would want to put up.

The residential properties can be your own home or a building which you can lease to people who are looking for a place to live in. with the latter, you could make a lot of profit for there are a lot of people, Penangite and foreigners, who are looking for places where they can live. Most of them would or could not buy a house and lot and prefer to rent. For commercial establishments, some of your best options are hotels, restaurants, malls or any size of shop or store.

Second, you need to make sure that the location of the Penang property you would buy is convenient in terms of transportation, shop of food supplies or market, etc. You would surely have a lot of customers/tenants if you would be able to get the location in or near the greater metropolitan area.

Lastly, a good investment does not only mean that you could get benefits in the form of money from it. For instance, a good investment such as a residential Penang property for your own use may also be a good investment. If it will not give you any trouble as a resident, it would surely be a good investment.

Penang Property Focus: Hotspots in Penang

Despite being the second-smallest state in Malaysia after Perlis, Penang boasts the highest population density in the country. It is home to about 2,500 people per sq km on the island and about 1,000 people per sq km on the mainland.

When presenting The Edge/Raine & Horne International Zaki+Parners Penang Housing Property Monitor for 4Q2009 (the article appeared in City & Country, Issue 793, Feb 15 to 21, 2010), Mike Geh, director of Raine & Horne International Zaki+Partners (Penang), noted that the number of transactions for residential properties in Penang increased 5.4% y-o-y last year. More transactions took place in 4Q2009 than in the previous quarters combined, he said.

Geh believes that the confidence of property buyers in Penang remains shaky despite the improving economic recovery. As such, he predicts that there will not be an unexpected jump in transactions this year, although more first-time homeowners and those looking to upgrade their homes are expected to purchase properties this year.

Khor Boon Soo, executive director of KGV-Lambert Smith Hampton (Penang), believes that, as property investment is usually a long-term endeavour, this is a good time to buy and hold on to properties in Penang. Khor acknowledges that property prices on Penang Island have always been high, owing to the limited availability of land for development. “As such, property prices will continue to rise in tandem with economic growth. Experience has shown that investors who wait for prices to fall before entering the market often end up buying at much higher prices. Where the Penang property market is concerned, the sooner you enter it, the better.”

Which are the hot growth spots? Teluk Kumbar, Batu Maung, Bayan Lepas, Sungai Ara and Relau, say property consultants The Edge spoke to. In general, these areas stand to benefit from factors such as new infrastructure (for instance, the second Penang Bridge), the offering of modern and planned townships, as well as scarcity of quality development land on the island.

“The shortage of suitable development land on the island has pushed development southwards to previously undesirable areas such as Relau, Sungai Ara and Batu Maung,” Khor explains.

Batu Maung
Khor says this former fishing village on the island is seeing rapid development. It has largely been cleared of squatters for a large modern and high-end residential development. VPC Alliance (Penang) Sdn Bhd director Kelvin Tan says one of the two growth areas in Penang is southeast of the island, from the Penang bridge interchange down to Batu Maung.

altGiven its proximity to the proposed Second Link, Mah Sing’s 86.7-acre Southbay project in Batu Maung is another major development that will change the landscape of Penang Island, says Tan. The first phase, comprising three-storey link houses priced from RM967,000, has been taken up, he notes. However, some bumiputera units remain unsold, he adds.

Similarly, Chan Wai Seen, director of JS Valuers Research & Consultancy Sdn Bhd, adds that the Teluk Kumbar/Batu Maung areas can be high growth locations, owing to their proximity to the second Penang Bridge. At present, notes Chan, there are limited large and properly planned townships in the area.

While Batu Maung is separated from the main Bayan Baru township by the airport, Khor believes that it now benefits from the Sungai Nibong-Jelutong Coastal Expressway, which provides fast and convenient access to George Town and the inner city. Like Chan of JS Valuers Research & Consultancy, Khor points out that the second Penang Bridge, which will link Batu Maung to the mainland, will be a major contributor to its potential.

Sungai Ara/Relau and Teluk Kumbar/Bayan Lepas
Shawn Ong K B, vice-president of asset valuation at Henry Butcher Malaysia (Penang), favours areas such as Sungai Ara/Relau and Bayan Lepas/Teluk Kumbar. He observes that there is still plenty of land for future development. “Owing to the scarcity of land suitable for development within and on the fringes of George Town city over the past few years, many developers, such as Mah Sing have shifted their developments to the southern part of the island,” notes Ong.

The Sungai Ara/Relau area and the Bayan Lepas/Teluk Kumbar areas are also blessed with good infrastructure, notes Ong. “For example, they are near Bayan Lepas Airport, easily accessible via the Bayan Lepas Expressway, and close to all amenities, such as the existing Penang Bridge and future second Penang Bridge.”

The interchange will be connected to the Bayan Lepas Expressway and will be near Batu Maung/Bayan Lepas Industrial area, says Ong.

Ong points out that in these areas, a freehold double-storey terraced house would cost RM550,000 to RM650,000, while a leasehold one would cost RM300,000 to RM350,000. Meanwhile, a freehold double-storey semi-detached house is priced at RM700,000 to RM850,000, while a leasehold equivalent would cost RM400,000 to RM500,000. Freehold condominiums of 1,000 to 1,300 sq ft are priced from RM220,000 to RM350,000.

Simpang Ampat, Bukit Tambun
On the mainland, Khor of KGV-Lambert Smith Hampton (Penang) believes that the area around Simpang Ampat/Bukit Tambun/Valdor in the South District of Province Wellesley (Seberang Prai) shows great potential for high growth. Tan favours the Simpang Ampat-Tambun-Batu Kawan area. However, he notes that the developments are mainly carried out by local (mainland) developers, as opposed to developments on the island, which are carried out by KL developers.

Khor says the Simpang Ampat/Bukit Tambun/Valdor locality, which lies at the end of the second Penang Bridge, will benefit directly from the new accessibility afforded by the link. “As land and property prices on the island are much more expensive, developments will eventually spill over to the mainland,” he predicts.

This is an excerpt of an article that first appeared in the May 2010 issue of Personal Money

This article was written By Lim Siew May of The Edge Malaysia

Properties in Penang – A Lucrative Market For the Intelligent Investors

Many investors are investing in Penang properties. One year ago, when the economic crisis came to Penang’s shore, the property price did not drop at all – not even 5%. In fact, many investors start to pick up properties at a very good bargain. In order to sell their properties that are already under construction, most developers are giving out unbelievably great promotions. Instead of the 10% down-payment (booking fees) that buyers used to pay, they only need to pay a mere 5%. Not only that, legal fees, stamping duties and transfer fees are all borne by the developer! There properties have since appreciated 7% of the initial purchase price in only one year.

Why is Penang such a popular place for property investors? There is sufficient demand from the population and the developers are providing steady supply. The young entrepreneurs are learning to invest in properties to earn monthly rental income as well as for capital appreciation. Penang is an industrialized state; many young graduates from outstation who migrate to work here require a roof over their head. Some, who decides to settle down, will eventually buy their own property to start a family. When the family numbers increases, they will buy a bigger property to accommodate the additional numbers. The “old” property will either be rented out or sold at a profit.

Penang is also island. Land here is getting scarce. With the increasing demand, the property price here is sure to increase with time. The demand not only comes from the local dwellers. Foreigners are also investing in Penang properties. Foreigners consider it cheap to invest in Penang, when compared to countries like Shenzhen, Singapore, Hong Kong, Shanghai and Xiamen. The property prices in these countries are so much more expensive. These foreigners are composed of retirees who participate in the Malaysia My Second Home Programme (MM2H). They find the cost of living in Penang much lower compared to where they come from (Australia, Europe, Japan and Korea), the food is delicious, and the people here friendly and the medical facility here are also advanced.

To give you a taste of the potential rate of returns, I will tell you about some projects and the returns obtained in a certain time frame. Putra Place Condominium was sold at RM160,000 at Year 2005. A friend of mine sold his unit at RM350,000 in Oct 2009. That is a whopping 118% ROI in a mere 4 years. Another bought a condominium at N Park for RM185,000 recently and is renting it out at RM1,200 a month. This is a return of 7.7% annually.

This article was written by: Vivienne T