Malaysia Property – What You Should Know Before Buying

Malaysia Property

If you are looking to invest in Malaysia Property, here are a few things you should know before making a purchase. These are: COVID-19, Rents and Rental yields. Read on to discover more, what these mean for you and your investment. Once you’re convinced, you can go ahead and sign the Sale and Purchase Agreement. Just make sure to get the paperwork in order and you’re good to go!

Rents

If you are planning to rent a property in Malaysia, it is essential to understand the rental market first. Rental rates may decline as supply continues to outstrip demand, new projects will likely be completed sooner than the number of tenants. In addition, tenants have many choices for rental accommodation in Malaysia, and the rental activity is focused on relocating tenants from old units. Furthermore, speculative investors may be under pressure to generate income to pay mortgages.

To protect yourself from the hassles of managing rent payments, be sure to prepare for some additional costs. For instance, a tenancy agreement requires tenants to pay a deposit for utility charges, which is normally two months’ gross rental. Some landlords require tenants to pay the full amount of security deposit, while others will accept half the amount. Either way, make sure to pay all bills on time. You can also choose to pay your rent online using your bank account details.

Rental yields

There are several factors to consider when calculating rental yields for Malaysia properties. Rental yield is an important metric for evaluating the income potential of investment properties. It is a percentage return on rental income, and excludes costs for property maintenance and financing. The rental yield varies from property to property and by location, but a good rental yield in Malaysia will typically be four to five percent. In addition to rental yield, property prices in Malaysia tend to fluctuate from year to year.

One of the first things to consider is location. The location should be near universities and colleges. These areas typically have higher rental yields than other areas. However, if you are looking for a good rental yield, you may want to look into a high-rise property in one of these areas. For example, in Puchong, Subang Jaya, Petaling Jaya and Damansara the landed property rental yields can reach 3-5% or higher. Likewise, in Bandar Sunway, Bukit Jalil , IOI Resort City Putrajaya and Desa Parkcity Kuala Lumpur two-bedroom properties can command yields of up to 4% or more.

What are you waiting for, learn more about Malaysian property!

COVID-19

The current global economic growth prospects are weakened by the ongoing Covid-19 pandemic. However, proactive measures taken by respective ministries have so far managed to contain the outbreak. The effect on the property market is expected to continue for the foreseeable future. Due to the movement control order, house prices are likely to decrease over the coming months. Although the impact of COVID-19 on the property market is still unknown, the situation is already impacting the global economy.

The Covid-19 pandemic has already had a profound effect on the Malaysian economy, financial markets, and real estate market. This has placed a considerable pressure on supply and demand, despite a healthy economy. The government has decided to implement a phased recovery plan, starting with a gradual relaxation of existing restrictions. New measures will be implemented to rebuild the economy, thereby providing a more favourable environment for real estate investors.

Housing affordability

Although the price of houses is still higher than the average income in Malaysia, it has consistently fallen below the affordable threshold. The ratio in Malaysia hovers between 4.0 and 5.0, with a high of 5.5 in 1995 and a low of 4.0 for almost two decades. In 2014, the ratio reached a record high of 5.1 and has since dropped back to around 4.0 or 5.0. The Malaysian property market continues to experience rising prices, but it is still relatively affordable compared to the rest of the world.

The government is trying to make the housing market more affordable in Malaysia by ramping up its supply and ensuring that the selection procedures are transparent. Regulation in the rental market needs to be improved to balance the power between landlords and tenants. Renting is generally less secure than home ownership, and tenants miss out on tax benefits that come with home ownership. To combat this, policymakers should introduce measures to protect tenants. For example, they should abolish the no-grounds eviction policy and implement a different rental regime for long-term leases.