Singapore aside, it seems the property market is cooling just across the border as well.
Similarly, higher interest rates are expected for the year ahead, and with weaker buying sentiments and a possible market saturation, property experts are saying that the property developers’ expectations and pricing will be the main factor determining a slowdown (or not) or sales this year. There was an increase in the Real Property Gains Tax rates and the minimum purchasing price for foreign buyers in October 2013, which have affected those investing in properties in the region.
Home prices in Malaysia have been rising faster than incomes. Could a bubble be slowly forming? How will this affect investors? In the past, it may have been easier and cheaper for foreign buyers to purchase a property in Malaysia, but when it comes to rental and future resale possibilities, the prospects may be slightly dimmer now as locals may not be able to afford and there are rules against selling the properties to other foreign buyers. Without a constant rental yield, the property could become an empty shell.
When purchasing overseas properties, selecting a good location may help shield you against some of these risks. And doing as much research as possible, finding a reputable agent, attending investment seminars and talks, will give you the tools to do just that. Home prices in Johor for example, are still on the rise, with a 5.44 per cent growth in Q3 of last year, albeit a drop from 10.93 per cent in Q1. There are still a reasonable pool of middle-income home buyers who are still looking for prime properties in this state, as well as select others such as Kuala Lumpur, Selangor and Penang. Singaporean investors may have the strong Singapore dollar as an advantage but a keen eye for spotting good launches and a sense of the right timing are what makes a worthy investment.