Expatriates Prefer KL, George Town

SINGAPORE: The Malaysian cities of Kuala Lumpur and Georgetown are among the top 10 locations in Asia where Europeans prefer to work and live in, according to a latest international location ratings survey.

Kuala Lumpur was ranked ninth and Georgetown 10th, after Singapore, Kobe, Yokohama, Hong Kong, Tokyo, Macau, Seoul and Taipei, said ECA International, an agency that develops and provides solutions for the management and assignment of employees around the world, in its annual Location Ratings Survey.   The survey rates living standards in more than 400 locations globally, according to categories including climate, air quality, health services, housing and utilities, isolation, social network and leisure facilities, infrastructure, personal safety and political tensions.   Its overall ratings normally would be used by international human resources departments to establish allowances which compensate expatriate staff for the difficulties of adapting to living in their assignment location.   Both Kuala Lumpur and Georgetown were also ranked ninth in Asia for Asians to live in, the survey said, adding that in the world's rankings, they took 61st and 64th spots, respectively.   In that same global category, Singapore took first placing, followed by Kobe (3), Yokohama (4), Tokyo (6), Hong Kong (11), Taipei (56), Macau (56) and Bangkok (63).   "These rankings reveal a large gulf in the quality of living among Asian locations," said ECA International Regional Director Asia Lee Quane.   He said, while there were a handful of locations in Asia which offered Asian assignees a good standard of living, the majority of locations would be challenging in some shape or form and therefore, warranting high location allowances.   The survey also said Baghdad remained the least favourable location to live in, followed by Kabul, Karachi and Port-au-Prince.   "A lack of suitable facilities for expatriates, along with high personal security risk, makes these locations the least desirable," the survey said.     Source : Bernama, 11 March 2009

Penang Property Market Is Lucrative

DESPITE the tough economic climate, investing in the property market in Penang is still a solid option.

Property prices in the state would always go up because land was limited here, state Tourism Development, Culture, Arts and Heritage Committee chairman Danny Law said.

“A crisis can turn out to be an opportunity. This is the time for investors to start develop-ping (more projects) because building materials and labour are easy to come by due to the lack of competition (in the industry).

“Meanwhile, house buyers will have lots of choices. They should put their savings to good use by investing in properties as this is sure to bring good returns,” he said after launching Plenitude Heights Sdn Bhd’s Bayu Ferringhi development project in Penang yesterday.

He added that the property prices in the state were still relatively low compared with those in other countries in the region.

“Foreigners consider it cheap to invest in Penang’s properties because prices in countries like Singapore, Hong Kong, Shanghai, Xiamen and Shen Chen are much higher.

“That’s why you see a lot of Japanese, Europeans and Australians participating in the Malaysia My Second Home Programme (MM2H).

“Many foreigners choose to retire here because the cost of living here is low, the local food is delicious, the cultural heritage is rich, the scenery is beautiful and medical facilities are very advanced,” he said.

Law also noted that MM2H residents enjoyed many benefits including a 10-year renewable social visit pass with multiple visa entry; a choice of either bringing their car over or purchasing a tax-free Malaysian-made car; and the option to take on contract jobs and dabble in business and investment ventures.

Source : The Star, 31 January 2009

Property Market On Robust Revival

Residential property powering sales in Asia

PETALING JAYA: Asia’s property market is making a strong comeback with renewed buying interest for residential property powering sales on expectation that the economic downtrend is bottoming out.

However, the commercial property market, including office and retail space, is still quite soft as easing demand has resulted in rental and occupancy rates sliding.

Bouncing back from the dampened sentiment brought on by the global financial crisis, the regional property market has shown more resilience this time around compared with the 1997 Asian financial crisis which took a heavier toll on the market.

There is increasing evidence that the US recession is bottoming out and this will stabilise the region’s economy and spur its recovery during the second half of the year.

The recovery is expected to provide a favourable basis for both residential sales and leasing markets in Asia, including Kuala Lumpur, Singapore, Hong Kong and Jakarta.

Industry observers are expecting a more robust revival in the region’s property market towards the end of the year, in tandem with a further pick-up in the global economy.

Home prices are forecast to see further upside, driven by huge liquidity in the economy as well as further rebounds in residential rents.

UOB Kay Hian in a recent regional market update said residential sales made a strong comeback in the second quarter of this year on expectations of an economic recovery and relative stability of the job market, despite a steep fall in gross domestic product growth rates, low mortgage rates and a lack of alternative high-yield investments.

“Price levels rebounded by 5% to 10% quarter-on-quarter in the second quarter after a 30% to 50% fall from the end of 2007 peak levels. As the economic recovery gains ground in the coming quarters, we expect sales momentum to pick up and price levels to firm up further on the back of improving liquidity conditions and easy financing options,” the research house added.

UOB Kay Hian said structural transformation had lent a high degree of sustainability to the current recovery.

Across the region, interest rates are drastically low and currencies are fairly stable in comparison to the situation during the Asian financial crisis.

“Household affordability levels are relatively high this time around due to the higher income levels, record low mortgage rates and stronger net household wealth. Corporate balance sheets are also a lot stronger. Furthermore, favourable migratory patterns to Asia due to its attractive long-term growth potential help support a sustainable recovery in the residential sector,” the research house explained in its report.

Market stabilisers

In the office property sector, stabilising economic conditions since June provided support to the prime office market and rentals in Asia for the rest of the year are unlikely to fall as drastically as in the first quarter 2009.

Knight Frank said on the flip side, a continued downward adjustment in occupancy costs could raise the competitiveness of doing business in most Asian cities, and provide more business opportunities for international firms and investors.

Although Kuala Lumpur still lags behind some regional cities like Singapore and Hong Kong, residential property sales have improved.

ECM Libra senior analyst Bernard Ching said the local residential market was more resilient than other regional cities and prices had not been much impacted. This compared with a price drop of about 30% to 40% in Singapore and Hong Kong, he added.

The affordable interest rate environment and lower entry cost for buyers supported property buying and investment activities during the period.

With the average mortgage base lending rate (at 5.5%) minus 2% at an all-time low, Ching said property investment was making a comeback as the preferred hedging tool against inflation.

According to Reapfield Properties Sdn Bhd president David Ong, clearer economic direction in both the global and local arenas had pushed property to regain its position as one of the leading investment instruments among Malaysians.

“Coupled with the more liberalising environment, the property market is in for stronger growth and sales performance going forward,” he noted.

Recent policy liberalisation measures to attract foreign direct investments to Malaysia’s real estate market and relaxation of rules on property purchases by foreigners have also resulted in positive effects on the property sector.

Source : The Star, 31 August 2009

Yahoo! Lists Penang Among World’s Top 10

GEORGE TOWN: An online travel guide has picked Penang as one of the top 10 islands in the world “you must see before you die.”

Yahoo! Travel writer Gary McKechnie ranks Penang eighth on the list of the “must visit” places.

Other islands listed are Bali, Vieques in Puerto Rico, Easter Island in Chile, Ischia in the bay of Naples (Italy), Chiloe in Chile, Bora Bora in French Polynesia, Key West in the Conch Republic, Galapagos in Ecuador and Palm Islands in Dubai.

These destinations offered something that could not be found anywhere else, said McKechnie in his article ‘10 Islands to Explore Before You Die’ (http://travel.yahoo.com/p-interests-37926474).

He praised Penang as Malaysia’s food capital and suggested that visitors did their “food crawl” along George Town’s street stalls.

He recommended that foodies head to the area adjacent to the Kek Lok Si Temple in Ayer Itam to feast on delicious food of rice, noodles, fish, shellfish, chicken, pork and vegetables.

He also suggested visitors try out lor bak, lok-lok and ikan bakar.

On the local architecture, he described Penang as having a range of modern high-rise buildings to 19th-century British architecture.

He also pointed out a mix of beach resorts, preserved mangroves, fishing villages, temples, mosques and churches.

“Kek Lok Si was the best example as the largest Buddhist temple in South-East Asia,” he said.

Investing Beyond Our Shores

In the past, only wealthy Malaysians could afford to buy homes in London, New York and other world leading cities. Today, an increasing number of higher and middle income earners are buying properties abroad.

COMPANY director P.E. Chua bought his first foreign property four years ago, paying A$350,000 (RM1.1mil) for a house in Melbourne, Australia.

“My daughter was seven years old then and I was worried about the 6% annual inflation cost in Australian education. So I thought it would be a good idea to invest in a landed property there instead of another property in KL,” says the 44-year-old.

Chua, who has rented out the Melbourne house, says he has the option of either letting his daughter stay there once she starts her tertiary studies, which could be another six or seven years, or dispose of the property to offset her education costs.

Chua is among a growing number of local investors snapping up properties abroad, finding the prices almost at par with or even lower than those in Kuala Lumpur and Penang where prices have skyrocketed in prime locations.

Apart from Australia, Britain and the United States have also become real estate hotspots for Malaysian investors hoping to spread their property portfolio.

Real estate firms with international partners have been aggressively promoting new housing projects overseas, placing prominent advertisements in local newspapers. Every other weekend, a property showcase or seminar is taking place in the Klang Valley and the crowd that turns up is an indication of the interest shown by local investors to diversify beyond our shores.

Another investor, K. Devaraj (not his real name), says he bought a 600sf studio apartment in central London two years ago for £400,000 (RM1.9mil). He considers the invest¬ment worthwhile as the price has since gone up.

“My son needed a place to stay while studying and I bought the place partially for investment,” he says. “I have no regrets as my son may just stay on even after his studies. So, it is likely I will keep the apartment for the long term.”

Like Devaraj, many Malaysian buyers are taking advantage of the current economic situation to pick up some good buys. The interest shown by individual investors is not surprising considering that our Employees Provident Fund has picked up premium British properties worth a total £634mil (RM3.1bil).

On Friday, Star Business reported that Lembaga Tabung Haji and Per¬mo¬dalan Nasional Bhd are also looking for premium properties for their yield, with London as their first choice, followed by Australian cities.

Henry Butcher Malaysia director Lim Eng Chong says that as local prices get higher for Malaysian buyers, overseas properties are deemed not so pricey any more.

“Apartments in London, for instance, can be quite affordable; in 2009, a unit may just cost £115,000 (RM721,041). The finishing is just as good, if not better than local properties,” he says.

“I think Malaysians have always had a disposable income but it is only in recent times that they have become more savvy.”

Jalin Realty International Pte Ltd chief executive officer Ian Chenconcurs, noting that while Malaysians have invested overseas for some time, it is only in recent years that the pace has picked up.

“It makes financial sense for parents to buy a place where their children can stay while studying instead of renting a place. Some already have friends and relatives living in the foreign city, and they ask: why not invest in a unit too,” says Chen.

Established over 30 years ago, Jalin ventured into marketing overseas properties five years ago. Its core market is Australia, where it is partnering conglomerates like Lend Lease, Australand, Frasers Property and other boutique developers to market their properties.

In the United States, the credit crunch since 2008 has led to property prices plunging. With lower prices and a weakening dollar, the US property market has become attractive to foreign investors, among them Malaysians, according to international property investment firm Robert Douglas.

In some places, says its head of sales and marketing (Asia) K. Daniel, prices are so low that one can even pick up a three-bedroom house from RM150,000. A good suburb location would cost RM200,000 onwards compared to RM700,000 back in 2007.

“For that property price, you can get back a monthly rental of between RM900 and RM1,000. Most of our clients are from middle to high income Malaysians, well-educated, aware of the global economic situation, the currency market, have a good investment portfolio and are ready to diversify,” he says.

Henry Butcher Malaysia’s international real estate general manager and business development general manager Jazmine Goh points out that potential customers would usually have done some research themselves or have friends or relatives check out the site.

For first-time investors, she adds, there are rental management experts to assist in managing the property.

Chua admits to being cautious before buying any property. In his case, he relies on Jalin Realty to over¬see his Australian investments as he cannot be there physically to handle them.

“Everything has worked out smoothly so far, with the rent banked into my account every month. There is also protection (insurance) against default by the tenant or damage caused and I feel I can better trust the property managers there than here,” Chua shares.

“Owners like us want peace of mind when it comes to rental returns.”

His advice for first-time buyers is that they need to know their objective and reason for investing overseas. Such investments could be made in preparation for their children’s future education or if they plan to retire or migrate, he says.

But Chua cautions against buying to speculate.

“There’s the currency (fluctuations) and other calculated risks to take into consideration and tax rates to be wary of. Buyers should also have holding power to allow enough time for a property to mature. And most importantly, get a trustworthy agent,” he says.

“It can be worth it on a medium to long-term basis, but I would advise against a short-term commitment as property disposal overseas is not that straightforward.”

Chua regards overseas investments like his as affordable so long as it’s dollar-for-dollar and one does not convert.

Another investor, who wishes to be known only as Vincent, says it can be a hassle renting out a house in Malaysia.

“Good tenants are hard to find and you have to personally deal with problematic tenants who give you a headache,” says Vincent, who owns several properties in Australia.

“With overseas properties, you have property managers to handle the lease and there’s protection for owners. Also, I don’t think rental returns here are that good anyway, even in upmarket locales.”

Chen says a huge advantage about property buying in Australia is the reliability of property management there. Property owners need only engage property managers who will help to look for tenants and manage the rental collection and renewal of tenancy agreements.

“There’s also a landlord protection insurance that protects the landlord in the event of loss of rental (delinquency in rental repayment), property damage or theft by the tenant,” he adds.

“Owners can thus invest with peace of mind knowing that the property is protected and in good hands.”

Source :The Star 04/09/2011