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Singaporeans have tailored needs for Malaysian property investments

Posted on 18 May 2012 | Comments Off

Singapore investors have also been pushed by low rental yields and have therefore invested in the larger cities such as Kuala Lumpur.

Singaporean real estate buyers looking into Malaysian property consider security and crime issues as well as being able to flip an asset quickly as top concerns in making future investments.

Property Guru group chief executive Steve Melhuish said that because many have made money flipping properties in Singapore’s property market, capital appreciation is also foremost to such buyers.

According to Asia One Business, Malaysia has tightened up on speculative activities, including implementing a real property gains tax of 10 per cent on disposal profits within the first two years of acquisition of 5 per cent on the third to fifth years.

In a recent survey, Malaysia was the top choice because of its proximity as well as prices being much cheaper.

Singapore investors have also been pushed by low rental yields and have therefore invested in the larger cities such as Kuala Lumpur, Penang, and Johor Baru, where yields are higher.

Malaysia Property Inc general manager Veena Loh said across the Causeway, older condo units in Johor Baru command low yields but the newer ones are doing much better.

Panel members observed that some expatriates in Singapore have bought properties in the special economic zone and are commuting to work, while others use their home as a weekend retreat.

“Malaysian prices are still very reasonable although some sectors have gone up,” said Ho Chin Soon, who runs his own research firm. He advised those who fear abandoned projects to buy from reputable developers.

Owing to Johor’s huge landbank, Ho does not see price pressure in the immediate future.

Many of Singapore’s rich are not averse to buying Malaysian property, but do not want to be bothered with managing their investments, stated Reapfield Properties group chief executive Gerard Kho.

Source: PropertyReport – 18 May 2010

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Posted in Overseas Property, Property Market / Real Estate

Tagged Kuala Lumpur, Malaysia property investment, rental yields

Rental yields stay frim in Apri

Posted on 12 May 2012 | Comments Off

Property owners who are worried that the return on their residential investment properties might have taken a tumble can afford to relax as rental yields held their ground last month.

This is mainly due to falling prices in the city centre and city fringe region and sustained rental demand.

Data from the Singapore Real Estate Exchange (SRX) found that overall yields for private non-landed homes was 4.06 per cent last month, easing slightly from the 4.23 per cent in the fourth quarter

SRX calculated the yield by dividing the average per square foot rent over 12 months by the average psf price of units sold last month.

Suburban homes posted the best yields of 4.02 per cent, city fringe homes pulled in 4 per cent while city centre homes had the lowest yields of just 3.24 per cent.

A total of 2,174 leases were inked in April by agencies under SRX, which collates and displays transactions by major property agencies, accounting for about 85 per cent of resale transactions in the market.

In a report by Straits Times, market analysts say yields are expected to hold at current levels in the short term. However, the sustained health of the rental market will depend on where the economy is headed, they add.

C&H Properties key executive officer Albert Lu said that the slight dip in rental yields last month does not indicate any sustained downward trend.

However he added that if the global economy should take a sharp turn for the worse, leading to foreign workers leaving Singapore, then rental demand and hence yields could be aversely affected.

Mr Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Group, thinks that yields in suburban areas could be compressed due to the upcoming supply of completed homes, even as home prices hold steady.

But, it is the opposite scenario in the city centre and city finge areas where yields may have risen as prices fall.

Recent data from the Urban Redevelopment Authority showed property prices falling 0.6 per cent for both the city centre and city fringe areas in the first quarter of the year.

Mr Tan Kok Keong, OrangeTee’s research and consultancy head, however, thinks that with the occupancy rate of suburban homes at more than 95 per cent, yields are likely to hold firm.

Rather, it is the yields of city centre homes that might be compressed as occupancy rates have been coming down in those areas, putting pressure on rents. This will, however, be a small drop since prices are also softening.

‘Rental yields will likely remain around this level. Until we see a larger scale expansion in the finance sector, it’s hard to see yields creeping up,’ he added.

Mr Tan said the rental market might face a challenging period from the second half of 2013 onwards when a bumper supply of public and private homes starts flooding the market.