Malaysia’s property market is set to benefit from a new low-cost airline service. Matt French wonders what other benefits there are to owning property in Malaysia.
The inaugural flight of the new budget Air Asia X service from London Stansted to Kuala Lumpur jetted off on 11th March, with early sales figures suggesting it will be a popular way of getting from Europe to Asia. To celebrate the launch, 5,000 promotional tickets were sold at just £99 each way, with 50,000 seats already booked since the five times a week service went on sale.
Future promotions could see the price of flights drop to just £49 each way! Air Asia’s founder, Tony Fernandes, described the service as “a milestone in aviation history”.
As well as increased, cheaper access to any investment property purchased in Malaysia, real estate investors in this part of the world enjoy other benefits as well. Though the Malaysian property boom of the last few years was fuelled by speculation from overseas, other areas in the region have suffered more since the onset of the global economic crisis. Whereas property prices in neighbouring Singapore,and regional rivals Vietnam, India and China have dropped by between 20 and 30 per cent, Malaysia property prices have fallen by less (around 10 and 15 per cent since the fourth quarter of last year). Though this may not seem like a benefit, property prices all over the world are dropping dramatically, and property markets that buck regional trends may be the ones that weather the current economic storm the best.
Another benefit attached to Malaysian property is the Malaysian government’s recently announced stimulus package, which has been aimed at boosting the country’s property market. Part of the recent announcement were improvements to the government’s Malaysia My Second Home (MM2H) programme, which is specifically designed to attract investors from overseas.
Since 2002 participants of the programme have been given a social visit pass and multiple-entry visa from the Malaysian Immigration Department which lasts for ten years, and is renewable thereafter – making Malaysia a very viable investment location. The recent changes mean, among other improvements, that participants are now allowed to do business as well as make investments in Malaysia, while the age limit for unmarried dependent children has been raised from 18 years to 21 years.
“We welcome the measures announced, including the improvement to the Malaysia My Second Home programme and a new programme to attract High Net Worth and skilled individuals. We are confident that these moves will help create demand for investment properties especially in the higher end market in urban areas.” said Real Estate and Housing Developers’ Association Malaysia (REHDA) President Datuk Ng Seing Liong.
A further benefit to purchasing a property in Malaysia that also shouldn’t be overlooked is that equivalent houses there are five times cheaper than those in Europe because of competitive exchange rates against the euro, according to the International Real Estate Federation. As the exchange rate works against British real estate investors entering markets that deal in euros, Malaysia may be one country where they turn their attention.
And in addition to these benefits associated with the country’s investment climate, the cost of living in Malaysia is one of the lowest in Asia (although its infrastructure is also of a high standard), it is one of the most politically stable countries in the world and English is spoken widely throughout the country.
In the future we may well see the people who take advantage of the new low-cost flights to Malaysia stimulating the country’s property market.
