Homebuyers in Hong Kong are turning to Malaysia for their retirement homes and second homes, with Penang, Johor Bahru and Kuala Lumpur getting a lot of interest due to affordable prices and a supply glut, reported the South China Morning Post.
According to Centaline Property Agency Senior Principal Project Director Terence Law, more than 50 percent of the 21 units released at a condominium project in Johor Bahru on 7 June were bought within the weekend by Hong Kong buyers.
He noted that around 35 percent of his clients were buying Malaysian properties as a retirement or secondary home.
This comes as property prices in Johor Bahru are much lower compared to other cities in Southeast Asia. Law estimates that they are around half the price of an average house in Bangkok and “about 20 times cheaper” than homes in Singapore’s prime locations.
The cost of living in Johor is also one of the lowest in the world, said Melissa Lee, Colliers International’s Associate Director of Valuation and Advisory Services.
“Particularly with the Malaysia My Second Home (MM2H) programme … it remains a target for retirees,” she said.
The MM2H is a government programme that gives 10-year renewable visas to non-Malaysians in an attempt to get foreigners to reside in Malaysia. It also allows visa holders to buy residential properties priced over RM1 million.
Prospects for price appreciation, however, are weak due to an oversupply of housing units.
Last year, around 32,000 residential units valued at about RM19.9 billion remained unsold, almost a threefold increase in four years, according to the National Property Information Centre (NAPIC). Of these, 6,066 units are found in Johor, which is the largest among the states.
“Currently, the occupancy rate for high-rise apartments in Johor is about 50 percent. For newer high-rise apartment developments, present occupancy rate is estimated to be about 30 percent or less,” said Tan Ka Leong, CBRE-WTW director in Johor.
He noted that these estimates do not take into consideration the unsold units in Forest City, a US$100 billion project in Johor that is touted to house 700,000 residents upon completion in 2035.