Malaysian property oversupply, falling ringgit and high-speed rail link to KL among the factors cited by buyers and analysts.
Against the backdrop of a weak Malaysian ringgit, the coming Singapore-Kuala Lumpur High Speed Rail and the series of property cooling measures introduced here, developers in Malaysian states beyond Johor Bahru are eyeing Singaporean investors.
The developer of a mixed development in Malacca – a three-hour drive away – that comprises a 500,000 sq ft theme park, retail mall and three hotels was the latest to do the courting.
With an oversupply of properties in Malaysia, analysts said developers could well continue to woo investors from Singapore.
In only two roadshows, more than 60 Singaporeans have pumped their money into retail and hotel units at Harbour City@Pulau Melaka, said its developer Hatten Group. Units in the mall cost between RM150,000 (S$57,000) and RM3.7 million, while suites are priced from RM270,000 to RM1.2 million.
A second roadshow held over the weekend drew dozens of Singaporean investors, mostly middle-aged, although the developer has begun to see younger Singaporean investors — those in their mid-30s — turning to Malaysian properties for their first punt.
Hatten Group’s Head of Marketing and Sales Cassandra Tio said the booming medical tourism industry in Malacca has led many Singaporeans and Indonesians to flock there.
“THE MAIN DRAW IS THE PRICE”
Speaking to TODAY at the roadshow on Sunday (Mar 1), prospective Singaporean investors pointed to Malacca’s appeal as a tourist destination and a viable alternative to Johor, particularly the Iskandar region, where there has been buzz in recent years.
Mr W Lee, 55, said: “It is something different as it is a historical town. It’s been mostly Johor or Kuala Lumpur so far, and I’m still cautious about Johor, as it is not quite safe.”
Another interested investor in his 40s, who wanted to be known only as Mr Lim, added: “Tourism in Malacca has potential and the weak ringgit now means it is cheaper for us to invest. Besides, the property market in Singapore now is not as good (for investment).”
Commenting on the trend, Mr Colin Tan, Director of Research and Consultancy at Suntec Real Estate, said: “Singaporeans may bite with the main draw being price, as the ringgit has fallen so much.”
While Malaysian developers have targeted Singaporean investors, these were uncommon and mainly in Johor, Penang and Kuala Lumpur.
Mr Tan added: “If developers feel that the particular property appeals to foreigners, they would come to Singapore. Also, there are many Malaysian permanent residents here, which is another target market.”
Century 21 Chief Executive Ku Swee Yong said developers in Malaysia are trying to cash in on the Singapore-Kuala Lumpur High Speed Rail, which is targeted for completion by 2020 — one of the planned stops is just outside Malacca.
“However, KL and Penang are better options. In Penang, for instance, there is a strong multinational corporation base, with strong job growth. Malacca is mostly still a tourist destination.”
He warned, however, that Malaysia may not be an ideal investor destination, given that there is an oversupply of properties and dipping tourism numbers, and the number of long-term residency applicants remains low.
Source : Channel News Asia | March 2, 2015