THE TRUTH ABOUT 'THE MALAYSIAN REAL ESTATE STORY': Telling the Malaysia story abroad

THE TRUTH ABOUT 'THE MALAYSIAN REAL ESTATE STORY': Telling the Malaysia story abroad
By : Farrah Naz Karim and Chong Jin Hun

Email to friend Print article

An artist’s impression of a proposed house in Penang. Nowhere in Asia is there a relatively cheap or hassle-free place like Malaysia where foreigners can own quality property with low down payments.


DOES Malaysia have what it takes to be an attractive destination for rich foreigners to buy property?

Yes, is the resounding answer from property and government experts.

Nowhere in Asia is there a relatively cheap or hassle-free place like scenic Malaysia where foreigners can own quality property, and with low down payments, they noted at a roundtable discussion in Putrajaya last week.

Some great areas where foreigners could buy property besides urban areas were those in Kota Kinabalu, Kuching, Kota Baru, parts of Penang, Cherating and the Iskandar Development Region in Johor.

Unfortunately, they pointed out, Malaysia’s diverse strengths in this multi-billion ringgit real estate business have so far not been fully exploited by local players and Malaysia’s story has not been told well abroad.

To put Malaysia on the world real estate map as a preferred destination for foreign property buyers, they wanted concrete joint government-private sector action to be taken.

What was needed, they said, was the creation of a centralised co-ordinating body that would draw up action plans to attract foreigners to own slices of prime real estate.

The body could be spearheaded by the National Implementation Directorate (NID) in the National Economic Action Council (NEAC) and include players from the property and real estate sectors, they added.

The experts who participated in a New Sunday Times roundtable included the head of the NEAC Secretariat, Datuk Dr K. Govindan, and a member of the private investment panel in the NID, Tan Sri Thong Yaw Hong.

Private sector participants at the roundtable, moderated by Business Times executive editor Rajan Moses, were Tan Sri Lee Kim Yew, managing director of Country Heights Holdings Bhd and Kumar Tharmalingam, secretary-general of Fiabci Asia Pacific.

The timing, they said, was just right to launch a co-ordinated effort to promote Malaysia as a property destination, given a number of government incentives announced recently to spark the country’s real estate and property sector.

In a landmark move, Malaysia recently abolished real property gains tax on property sales and put in place other incentives to make it easier for locals and foreigners to buy and sell real estate.

National Implementation Directorate head Govindan said boosting property sales to foreigners was in tandem with the country’s attempt to restructure its economy.

"We are trying to move into a knowledge-based economy and this fits in well with our attempt to move into what is known as the services sector," he said.

"We want to develop Malaysia into a centre for financial services, including Islamic finance and we want to attract the fund managers and equity venture capitalists.

"Hence, there is also an excellent opportunity for them to reside in Malaysia."

The target is for ownership of some RM20 billion worth of property by 2010.

Lee said that Malaysia, with its strong selling points and excellent location, had the edge in becoming an international property destination.

With good products offered by real-estate developers and architectural accolades received, Malaysia, he said, had proven its excellence in property and infrastructure development.

"Our airport and the green landscape throughout the country are beyond comparison.

"Our unique multiracial culture and widely spoken English is also a major pull factor," Lee said.

Kumar said Malaysia was set back by poor marketing of the country’s offerings and potentials.

He noted, that in the Jones Lang La Salle transparency index, Malaysia was placed in tier two in transparency in real estate because of conveyancing problems.

It takes about four months to register a piece of real estate while countries like Singapore can get it done in three days.

"In that context, we dropped one tier. But in terms of the delivery of the system of the real estate, because we have the Torrent system of real estate, ownership is not an issue.

"In the whole of Southeast Asia, with exception of Singapore, we have the most complete economic delivery system for real estate.

"You buy a house from a developer, the developer arranges the financing, transfers, stamp duty and deposits for you from their one-stop-centre office where there are a lawyer, valuer and the tax agent."

However, it is also time to revisit ancillary processes and practices which are monitored by foreigners and if not done well could be a turn off for some.

Govindan said: "While we’re trying to bring in high-level, rich and high net worth people to buy our property, we also have to make sure that we have a proper maintenance culture."

This is also timely because the government was making efforts to improve processes and was speeding up the delivery of services, including Immigration, processing of applications and land transfers, he added.

Thong said one urgent measure could be the launching of roadshows by both the government and the private sector to promote Malaysian real estate.

Tailoring some Malaysian property projects to meet the taste of foreign buyers, especially the Japanese, Korean and Taiwanese, could go a long way towards getting them to buy relatively cheap Malaysian assets, Lee said.

For example, the Japanese found property in some areas relatively cheap and were willing spenders, but they refrained from buying because the projects failed to complement their lifestyle.

Kumar said a successful marketing project was in Kudat where 40 villas were sold only in London to high net worth buyers because it met their taste for £1 million (RM6.9 million) each.

He suggested that the government also attract international property agencies, analysts and renowned real estate players to base offices in Malaysia.

They could be Malaysia’s best ambassadors abroad given their networking with hedge funds and high net-worth individuals.

He called on the NEAC to bring together the over 800 developers, 5,000 real estate agents, the three Islamic, 10 local and four international banks to help market Malaysia’s real estate abroad.