Malaysian property to be hot in 2011

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Real estate property experts state that Malaysian property will continue to grow and be favorable in the upcoming year. Interest in Malaysia in the current year for investment properties has been quite high. Experts also state that they do not anticipate a housing bubble, which is good news to realtors as well as investors.

It seems that a majority of investors are from overseas but more local transactions are anticipated to occur in 2011. The economy has been relatively stable and is expected to grow stronger as well.

Purchasers are pleased to hear that a housing bubble will most likely not occur. A housing bubble is a “period of rapid increases in the valuation of housing or real estate prices until they reach unsustainable levels and then followed by the reduction in prices.”

In Klang Valley, Johor, and Penang, residential transactions have increased by 11, 47, and 7 percent respectively between the first half of 2009 up till the first half of 2010. House prices in these areas have increased by between 20 and 50 percent in the last three years as well.

Bank Negara Malaysia is monitoring the market and banks have “fine-tuned the loan-to-value ratio to avoid non-performing loans. There has also been a 70 percent LTV cap for third party investments to help curb excessive investments. These measures help keep the housing prices from going up and up.

First-time home buyers have seen incentives to purchase homes such as a stamp duty exemption of 50 percent for homes not exceeding RM350,000 as well as 100 percent loans to purchase homes below RM220,000. This allows more options for purchasers and will most likely benefit the property market as well.

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