Property Hunter Magazine Issue 63- February 2015 | Page 62

BANKING AND INVESTMENT NEWS

Malaysia Has Liberal Policies On Foreign Ownership
is price pressure here and land is a
state matter with different pricing
limits for foreign ownership.
However, they are allowed to buy
freehold, landed properties and
high-rise condominiums in these
three most popular areas. Foreign
buyers in Penang are subject to a
minimum threshold of RM1 million
for condos and RM2 million for
landed properties on the island, and
RM1 million for all types of properties
in Seberang Prai on the mainland.

E

ven as the Asean Economic
Community (AEC) heads
towards the goal of regional
economic integration by 2015,
the regional property markets
continue to see restrictions among
member countries.
Here is a quick roundup of Asean
5 comprising Singapore, the
Philippines, Indonesia, Thailand
and Malaysia.
The conclusion is that Malaysia
seems to be the most liberal in the
case of foreign property ownership
although land is a state matter. If a
foreign national wishes to purchase
a residential property in Malaysia, he
must therefore make an application
to the state authority to obtain the
state consent before he completes
the transaction. If this is not
complied with, the sale or disposal
can be rendered null and void.
Even with this additional level to
overcome in order to complete a
purchase, foreigners can own and
purchase freehold land and other
types of properties, landed and
high-rise projects, industrial and
commercial properties, anywhere
in the country as long as they are

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prepared to fork out a minimum
of RM2 million. Only Malay reserve
land is prohibited.
They can own properties 100%
under their names. Therefore,
despite the various pricing
thresholds in the different states
and the need for state consent,
these restrictions seem minute
compared with the compliance in
other countries.
While the current interest among
Malaysians and well-heeled
Singaporeans are Britain, Australia
and the United States, perhaps
in the very distant future, the
property markets closer to home
will be more appealing and the
buying process more cohesive and
integrated among the people who
reside in this region.
Knight Frank Asia-Pacific head of
research Nicholas Holt considers
four of these five markets.
THAILAND
The last couple of years saw
the marketing of Thailand’s
condominiums in Malaysia.
Foreigners are allowed to buy into
this market as long as local Thais own

51% of the project. This is by far the
most straightforward of purchases
among individuals and corporations.
Buying land is more complex.
A number of foreigners have bought
into this market but the number is
not big with Malaysian, Singaporean,
British, and Hong Kong investors
among the investors. Compared to
the Singapore and Hong Kong real
estate, Thailand is many times more
affordable for investors from these
two countries. People buy into the
market because they like the culture
and shopping opportunities there.
The political uncertainties and the
disruptions to law and order have
not dampened appetite. Every
couple of years, an issue erupts but
the city bounces back.
Thai developers sell quite well.
Bangkok, Phuket are the top
destinations, followed by a lesser
degree of interest in Pattaya and
Chiangmai, and a smaller number in
Koh Sah Mui.
MALAYSIA
The key markets are Iskandar
Malaysia in Johor, Penang in the
north and the Klang Valley. There

In Johor, the minimum price cap is
RM1 million but they are allowed
to buy most types of properties,
while in Selangor it is RM2 million in
most of the districts. In the Federal
Territory, the minimum threshold is
RM1 million.
These restrictions aside, the
last couple of years have seen a
greater interest in locations such
as Kota Kinabalu in Sabah among
Asian buyers. Malaysia also has
a Malaysia My Second Home
programme under the Tourism
and Culture Ministry which is open
to all countries. The programme
has numerous requirements
which include a minimum monthly
income, minimum liquid assets, a
fixed deposit, plus various other
rules. It was launched in 2002.
SINGAPORE
This market has always been
attractive to Malaysians,
Indonesians and Chinese nationals.
Prices have kept going up from
2009 to 2013, prompting multiple
rounds of cooling measures. The
market has been going down for
over a year and will continue to cool
in 2015. The commercial and office
market is quite strong.
In October the government said
there was some distance to go in
achieving “a meaningful correction”,
signaling “an engineered slowdown”.