China remains top for land transactions

By IZZAT RATNA & LYDIA NATHAN

About 35% of residential land transactions by foreign buyers in Malaysia for the the last five years were mainly from China, particularly in the southern region, according to a global real estate consulting firm.

“One of the main reasons for Chinese investors to penetrate the Johor market is attributed to its barren ground and unclaimed land that are being transformed into high-rise luxury apartments,” said Knight Frank Malaysia Sdn Bhd MD Sakurnan Subramaniam in a statement last Friday.

In Knight Frank’s May 2017 issue of Asia-Pacific Residential Review, it stated that favourable foreign residency scheme, lower cost of living, strong economic potential and weak ringgit are factors that have propelled the influx of foreign direct investments in the country.

The review that tracks cross-border residential land acquisition activity in Asia Pacific also said that despite the lacklustre general outlook for Malaysia’s property segment, it is still improving gradually on the back of positive sentiment.

Over the last decade, developers from Asia Pacific had shown a keen interest in seek- ing out opportunities within their home region.

Almost RM8.99 billion, both cross border and domestic trades were invested in Asia Pacific residential land sites.

Knight Frank Asia Pacific head of research Nicholas Holt said that following the flurry of cooling measures introduced in major Chinese cities and the recently enforced capital controls, more Chinese developers are expected to put a greater amount of money into Hong Kong and smaller Tier-3 Chinese cities this year.

Holt further said that as at first-quarter of 2017, Chinese developers have invested more than RM21.83 billion in the region, with more than RM20.97 billion or 95% concen- trated in Hong Kong.

The investment of land in Asia Pacific was reported to have risen by 136.9% over the last decade, with a tally of more than RM179.76 billion in 2016, as opposed to RM76.18 billion in 2007.

Most main players originated from Hong Kong and China, with a massive 80.2% of the total money spent on buying up land in the Asia-Pacific region.

Singapore followed not too far behind, with a reported 7.3% of the total cross-border volume used to develop more overseas opportunities. Other key players are the US (3.2%), Japan (2.4%), Malaysia (1.7%) and the United Arab Emirates (1.1%).