Malaysia’s capital is still regarded as among the best in Asia to invest in despite fears that the reimposition of the Real Property Gains Tax of five per cent under the 2010 Budget may dampen the real estate market.
Kuala Lumpur is ranked the top five property investment haven underpinned by high yields and low roundtrip costs.
The Global Property Guide on buying residential real estate sees good value in Asian properties and recommends “buy for yields but avoid countries with high roundtrip transaction costs” such as taxes, registry fees and realtor expenses.
The guide said high roundtrip costs will mean that the most obvious markets on the yield basis such as Indonesia and the Philippines are not really so attractive.
KL is Asia’s top five investment haven
For those who want to buy where they would spend time, it recommended Malaysia and Thailand for their high yields and low roundtrip costs, citing the 8.91 per cent gross yield and 5.50 per cent roundtrip costs in Kuala Lumpur, among the 15 cities it analysed.
The guide said Cambodia, which has seen huge price appreciation, is the easiest country in Indochina to buy properties and where buyers can establish control over land despite constitutional prohibitions on foreign ownership.
“It’s worth considering for its long term growth. However, the yields are low and you must add costs for company formation and administration.”
Among other places, the guide ruled out Vietnam despite its good yields “because individual foreign buyers cannot sublet although they can buy through a lease and an offshore company”.
But for domestically-resident buyers, the guide said Vietnam is “likely to be attractive once credit crunch is over”, highlighting its high yields, strong longer economic growth and reasonable taxes.
Then again, cities in Asia Offering the most attractive of yields and very low roundtrip costs need not mean screaming buys either.
Ulan Bator in Mongolia offers these enticements plus strong economic growth and is an investment market where one can buy apartment to rent to foreign executives, the guide said, but pointed out, “You’d never want to live there … supply of new quality apartment remains limited even though the city is seeing significant construction activities … Mongolians have little experience in building to high standards.”
Some advice on buying internationally?
The safest way for British expatriates to invest in Asian real estate, said overseas property resource Nubricks.com director Chintan Mahida, is buy in established countries, noting “Brits are interested in Malaysia and Singapore … China is a complex place to buy … it’s be best to buy in larger city such as Shanghai”.
Also bear in mind that once you have bought a property abroad, it costs you money to keep it or to sell.
According to the shelteroffshore.com website, people make the biggest mistake of forgetting about having to pay the annual taxes, fees and costs such as property tax, electricity bills and someone to look after the place when you are not there.
And if you sell it, you may have to pay capital gains tax and to improve it if it not up to scratch, plus the bills will keep rolling in until you home abroad belongs to someone else.
Source: NST Property
For Malaysia Real Estate investment enquiries, please fill up the propertrack.com Property Wanted form
For Malaysia mortgage, home loan & property refinancing enquiries, please fill up the mortgagebroker.my home loan desk enquiries form
