The Edge, 28 November 2011 - Malaysia diaspora among the buyers
The Edge, 28 November 2011
The Malaysian diaspora which the World Bank estimates at about one million is believed to be behind a substantial number of property transactions in the state.
Henry Bucher Malaysia (Penang) director Dr Teoh Poh Huat says Malaysians living outside the country are investing in Penang properties and make up 10% to 20% of the transactions.
"It is really these 10% to 20% of buyers who are creating strong support on the Malaysian real estate scene. They come home during festive seasons from all over the world. Many of they work in Shanghai, Hong Kong, New York, Singapore, London, Australia and sometimes Jakarta.
"In fact, they are the ones who will be our best embassadors to introduce Malaysian real estate to the world," he says.
Teoh adds that although property prices have gone up in the last year and are much more expensive than a decade ago, "the mindset of these people, in comparison with what's in their employment-based location, this seems to be very cheap".
"They realise that going forward, because of inflation, if they do not buy it now, it is going to be more expensive later. Whether that mindset is right or wrong is not important, but inflation has always been a major issue when it comes to property prices. And buying a property is and has been proven to be an excellent hedge to inflation, if you make your choices wisely," he says.
Datuk Jerry Chan, chairman of the Real Estate and Housing Developers' Association of Malaysia (Penang chapter), says the returning diaspora is however not investing in expensive homes on the island. Most are buying terraced and semi-detached houses priced below RM3 million especially Penangites working in Singapore.
He says some are buying homes for their parents but he believes the Penang diaspora is behind only 10% of the total transactions. Foreigners make up even less, at 3% to 5%, he says.