Not a Lot of People Know That...
Did you know that Malaysia is actually made up of two completely different land masses separated by a huge stretch of the south China sea? – as actor Michael Caine would say: ‘not a lot of people know that.’ (well, ok he never actually said it, but everyone thinks he did. I digress…)
Well anyway, Malaysia’s capital - Kuala Lumpur - is on the western bit, where the majority of the population lives. There’s nothing wrong with the east; it too is blessed with fine beaches, forests and mountains. It’s just that most of the important things in any country tend to take place around the capital, right? So that’s where the power base and economic might tend to congregate.
On the resources front, Malaysia is a big exporter of palm oil, which is basically a type of vegetable oil. This brings in shed loads of income, but rubber, cocoa and tobacco also play a part. However, Malaysia is considered to be a newly industrialised country and isn’t restricting itself to traditional exports – it’s also the world’s leading exporter of computer disk drives of all things, and it’s tourism industry has plenty of room for expansion. Overall, although it’s having to face serious economic competition from China and India (who isn’t?) the economy is doing very well thank you, compared to neighbours like Singapore, Brunei and the Philippines. So what about property then?
Well, it’s a double-edged sword as they say. Over the last few months, rich buyers from Russia, India and Pakistan have been snapping up properties, and in doing so keeping the property market buoyant. However, this has been tempered somewhat by rising fuel and energy prices, which have made construction more expensive, and hence property prices aren’t as low as they could be. This is starting to exclude the local market from the prime locations, whose pay packets cannot compete with the new millionaire (or billionaire) types from abroad.
Nonetheless, it is still helping to steer the Malaysian economy in the right direction and in some ways perhaps that growth will be steadier and more sustainable than it would have been if it wasn’t restricted by the all pervading ‘credit crunch.’ Meanwhile the government has been busy on a social programme designed to repair and upgrade the homes of some of the poorest of its population. To achieve this, it’s been offering incentives to building companies to contribute to the scheme, including matching grants for each contribution to the project, which is called the ‘Amal Jariah’ programme. Will any company that gets involved be awarded a certain degree of government patronage in the future? Who knows? But so far, around 5,000 homes have been spruced up, with a target of 30,000. Good vote-winning stuff.
Meanwhile, there has been some disquiet in the Sabah peninsula where some complaints from property investors have been surfacing regarding the re-sale of units. The country’s Daily Express newspaper (the independent national newspaper of east Malaysia) reports that there have been ‘numerous complaints by house buyers on the requirement of getting consent from the developer before they can sell or get a new loan from the bank.’ The result being that ‘when house buyers are unable to get consent from the private developers that have wound-up they have to go through a tedious process to get consent from the appointed receivers.’ This has yet to be fully resolved, and is proving to be something of a headache for prospective buyers in that region.
In general though, investment property in Malaysia is still on the up. It’s excellent infrastructure, tropical climate, exotic culture, great sports facilities (like golf, diving, and other water sports) beautiful beaches and well-designed holiday resorts, are all contributing to Malaysia’s current success and future prosperity. And not a lot of people know that…
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