The prime property market of this economy will be also significant for wealth managers looking to prospect for new clients in the region. 

“The property market in Southeast Asia is buoyant and has been resilient to macroeconomic risks, thanks to the growing wealth in Asia and continuous strong demand. Property prices in Malaysia have grown by 20 per cent over the past 5 years,” Richard Teoh, sales director of Hamptons International in Hong Kong told WealthBriefingAsia.

The numbers

The total cost of buying and re-selling a residential property, including registration, real estate agent, legal, sales and transfer taxes, is comparatively low in Malaysia, representing 5.5 per cent, versus 26.27 per cent  in Indonesia and 18.23 per cent in the Philippines, for example.

At present, gross annual rental income as a percentage of property purchase prices in Malaysia is 6.21 per cent, versus just 3.11, 2.95 and 2.66 per cent for Hong Kong, Singapore and China, respectively, making the potential for value appreciation “very attractive”, according to the real estate specialist.

Furthermore, the price per square foot for high end properties in Hong Kong and Singapore averages around the $2500 mark, and just over $2000 in Shanghai, while  Kuala Lumpur luxury condominiums can currently be purchased for around a quarter of the price, or $500 per square foot.

“For some of the high quality residential projects in Kuala Lumpur, our clients have seen gains of at least 20 per cent over a few years’ period,” Teoh said.

He has “no doubt” the market demand will remain strong in the next few years, supported by both domestic affordability as well as strong investment appetites of foreign buyers, especially those from Hong Kong and Singapore.

Sales

This interest was evidenced last week at the Asia Bankers Club’s inaugural World Lifestyle Property Series event in Hong Kong. The 16,000-strong club teamed up with Hamptons and Malaysian property developer Eastern & Oriental, to give its members a preview of The Mews, a luxury freehold property development, 10 minutes’ walk away from Kuala Lumpur City Centre Twin Towers.

“The event was an unqualified success, resulting in 15 reservations of units specifically by Asia Bankers Club members,” said Kingston Lai, chief executive and founder of ABC.

“We are confident that Malaysian properties, particularly those in prime locations such as Kuala Lumpur City Centre, will continue to offer good value with lucrative returns,” Teoh added.