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Buying a Property in Malaysia

Why Malaysia?

Malaysia is one of the most ethnically-diverse places in the world, and has gained in popularity with expatriates from both Europe and the US despite the relative geographical distance from both regions. With a tropical climate to attract those in colder parts of the world, and an equally warm welcome to foreign settlers, Malaysia has become one of the prime relocation destinations in South East Asia.

When you look a little closer, Malaysia has all of the attributes that make it a perfect overseas property destination. English is widely spoken, foreigners are welcomed, the country is relatively affluent, and is stable both politically and economically. The cost of living is also low, particularly for those with an income from overseas, and living standards are high.

The natural environment is beautiful and diverse as the country is divided into two distinct parts, while tropical heat is the order of the day for most of the year, making residents grateful for the near-ubiquitous air conditioning. The multi-cultural, multi-racial aspect of living in Malaysia is backed up by its position as a hub of transport in the region. Flights leave Kuala Lumpur International Airport for all major cities in South East Asia and further afield, and it is a major stopover for travellers from Europe to Australasia.

Popular buying locations

As a country made up of thirteen different states and three different territories, Malaysia is one of the most diverse places in South East Asia. The country is split geographically into two parts – Peninsular Malaysia and Malaysian Borneo – and separated by the South China Sea .The tropical climate is due to the country’s close location to the equator.

The capital, Kuala Lumpur, is the focus of the property market in Malaysia, and it retains a good deal of British influence from its days as a colonial outpost. The city has come on to the world stage in recent years, having hosted sporting and cultural events that brought the world’s media spotlight. The development of KL, as it is known, into a world-leading city has been helped by the building of the Petronas Towers, for a time the tallest buildings in the world.

Kuala Lumpur has the distinction of being a low-density city and spread across a large area, despite the magnificence of the skyscrapers in the central districts. This means that there is the opportunity for developers to build gated developments of individual properties in lush and green surroundings. Developers are also building what might be called traditional city apartments in tower blocks around the city and the marina, but KL is one of the few places in the world where you have the choice to have city centre property or more private and separate homes still within easy commuting distance of the centre of the city.

With the standard of living being so high, most of the new-build property in KL is of high quality and will suit anyone used to a western style of life. Most people who have lived in a major city previously will marvel at the amount of space available, as well as the prices of what is available. Also of note is the low crime rate of Kuala Lumpur, making the city even more attractive to foreign settler who may not know their way around or may be nervous of travelling around on their own.

While the vast majority of the property sold to overseas buyers in Malaysia is within the metropolitan region of Kuala Lumpur, there are a number of projects located away from the capital that will provoke a good deal of consideration in those who know the country and may be looking for something a little bit different. Georgetown, the capital city of the Penang region, a small island off the north-western coast of the mainland, has a thriving financial and waterfront district, with some attractive developments of both apartment buildings and condo-hotels.

Other developments can be found near the city of Johor Bahru in the south of the country, and Sungai Petani in the north. Should you be tempted to buy outside of KL, be prepared to be a little more isolated. You may need to be reasonably fluent in local dialects in order to make sure you can survive comfortably. You should also try to make sure that you have visited the region in all seasons and spent some time there on your own in order to be certain that the move will be the right one for you. One of the most important things to consider is the travelling time should you need to get back to the UK in an emergency. Living in one of the more far-flung locations will afford you great properties in great locations, but your travel time back to the UK might be measured in days rather than hours.

Legal issues

Expatriates are legally allowed to buy property in Malaysia, although there are some restrictions to keep in mind. Foreigners are permitted to buy two houses at a cost no less than RM 150,000 (around £23,500) each, and are then allowed to apply for finance at a typical rate of 60 per cent loan-to-value (LTV). Some states have now abolished the upper limit on loan values and LTV rates, but make sure to take expert advice before committing yourself to any loan for property in Malaysia.

There is also a programme in place that has been recently introduced by the government in order to encourage foreign retirees to the country. The ‘Malaysia My Second Home’ (MM2H) programme has removed some of the obstacles that were in place for foreigners buying in the country, and smoothed out the process.

The other major restriction to consider is that in some areas of the country, it is only possible for local people and other indigenous groups to buy and sell land or property. If you are considering buying your own plot of land upon which to build, it is vital you check this ahead of signing any contracts.

More pages

Page 1: Why Malaysia?
Page 2: The buying process
Page 3: Investment potential

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