Malaysia is now Chinese buyers’ second most popular South-east Asian country, an improvement from third place in 2022, according to data released today (3 April) by Juwai IQI, the real estate network said the improvement was due to Malaysia’s convenient location, economic stability, international education sector, and growing property market.
Juwai IQI Co-Founder and Group CEO Kashif Ansari said, “Malaysia continues to attract significant foreign residential real estate investment. Foreign investors view properties in Malaysia as lucrative opportunities for capital appreciation and rental yields.”
Malaysia has been one of the top three countries in South-east Asia for residential buyers from China for the past five years. This year, Malaysia is the second-ranked destination for buyers from China, up one spot from third in 2022. Vietnam fell from second- ranked to third, swapping places with Malaysia.
As the first choice, Thailand is the only South-east Asian destination that consistently ranks more highly than Malaysia. It has been the number-one destination for Chinese buyers since before 2018.
Why Do They Buy?
Chinese buyers who purchased residential property today report having roughly the same reasons for buying as in 2018. According to Juwai, the buyers said they want to live in Malaysia and at the same time, they consider their property purchases here to be good investments. If they didn’t, they would probably rent instead of purchasing. That’s very similar to local buyers, who are usually purchasing for their own use and also to establish their financial security over the long term.
“Sixty per cent of Chinese buyers say they are purchasing for investment purposes in Malaysia and South-east Asia. That’s the same share as in 2018. The share of buyers reporting that they purchase for their own use was 63% in 2023, which is down three percentage points from the 66% of 2018.
The retiree segment of the foreign buyer market is often overlooked, but this is a very lucrative group for Malaysia. Retirees from China have joined those from the UK and other parts of Europe in choosing Malaysia because of its lifestyle and affordability. Juwai said its data suggests that Chinese retirees who have homes in Malaysia spend an average of around 150 days per year here. There is no hard data on this, so that estimate is based on the conversations it added.
Among key factors in choosing Malaysia is for its political stability, a strong manufacturing base of its own, and is close enough to China to integrate with Chinese supply chains. It is a natural destination for investors from China, Japan, and the United States. Foreign investment in ASEAN reached a record US$222.5 billion (RM1.05 trillion) in 2022.
“Some of the biggest investments in Malaysia have been from Chinese companies, like the car maker Zhejiang Geely Holding, which last year promised to invest US$10 billion (RM47.5 billion) in a Perak auto manufacturing centre. In fact, the United States invests the most in South-east Asia, with US$74.3 billion (RM352.8 billion) between 2018 and 2022, compared to US$68.5 billion (RM325.3 billion) for China. Japan is the third-largest investor in South-east Asia.
Malaysia to Remain an Investor’s Favourite
The construction of new infrastructure, such as the RTS to Singapore, attracts a significant amount of investment. Foreign buyers who want to enjoy the best of both Singapore and Malaysia will easily be able to live in Johor and travel to Singapore whenever they like.
Juwai said conditions to continue to fluctuate and that Malaysia will continue to benefit from the shift of investment to ASEAN and the desire of foreign buyers for appealing lifestyles at an affordable price and in a convenient location. It added Malaysia could retain its position in the competitive South-east Asian region over the next two years.
