by S BIRRUNTHA / pic by TMR FILE
THE Malaysian home market remains appealing to Chinese buyers due to the high quality of life on offer, its proximity to China, and relatively low prices, according to real estate technology group Juwai IQI.
Its group co-founder and CEO Kashif Ansari noted that some buyers will be seeking bargains, and hoping to buy unsold new units from developers at a discounted price.
“Another factor motivating Chinese investors is the market in China, which is lackluster at the moment.
“Restrictions on investing and on the development industry have some Chinese buyers looking overseas for alternatives,” he said in a statement yesterday.
According to Kashif, even though China’s borders remain closed at this time, Juwai IQI believes that 2022 will see Chinese buying of Malaysian property begin to climb again.
“Chinese buyer demand for Malaysian homes is at about one-third the level it was before the pandemic, but will begin climbing back up in 2022.
“The drop has been due to the reduction in travel between the two countries,” he said.
Kashif added that after Malaysia reopens its borders sometime in the second quarter of the year (2Q22), travel will remain limited by China’s zero-Covid policy.
He added that Chinese who want to travel to Malaysia have to undergo an extended quarantine upon returning home and as a result, most Chinese have avoided overseas travel.
Commenting on Malaysia My Second Home (MM2H), Kashif said there has been an anxiety about the programme but Juwai IQI believe that it will continue to be a successful if smaller program under the revised policies.
He highlighted that the government had announced in January that they had received 111 applications.
“Even with fewer applicants, the new MM2H will provide more benefits for Malaysians.
“If all 111 of these applicants are approved, that could result in new fixed deposits of RM1 billion, which is more than triple what the amount would have been under the old conditions,” he said.
Kashif also pointed out that the top source of MM2H applicants is China, including Hong Kong.
He noted that there are more than twice as many applicants from China from any other country.
However, he said this data is based on the program under the old conditions, as new applicant country data is not yet available.
Meanwhile, Kashif also said foreign buyers in Malaysia account for 13% of new home purchases in the first half of 2021 (1H21), according to Juwai IQI’s 3Q21 Malaysian Property Survey & Index.
He added that they accounted for the largest share of new home buying in Sarawak at 15%, as well as Kuala Lumpur and Selangor at 13% respectively.
“NAPIC reports that RM18 billion of residential property sold in 3Q21. Our survey found that foreign buyers account for 10% to 15% of new and second-hand transactions in Malaysia’s largest cities.
“Working on the back of an envelope, you can estimate that foreign buyers purchase in the range of RM1.8 billion of real estate per quarter, or RM7.2 billion per year,” he noted.