COVID-19 Erased Chinese, HK Buyers’ Demand For Local Properties
Foreign buyers’ interest in Malaysia’s property market, particularly sales coming from China and Hong Kong, halted as both regions continue to be shaken by the coronavirus outbreak.
“For the time being, foreign demand for Malaysian properties, particularly from China and Hong Kong, are slowing down or almost stopped as they (tourists) have stopped coming (to Malaysia) due to the coronavirus outbreak,” said VPC Realtors (JB) Sdn Bhd Asia-Pacific property consultant Bruce Lee.
Local property developers were counting on Hong Kongers to buy the unsold properties following the anti-government rally that lasted for more than seven months. However, the Covid-19 outbreak has taken a toll on the economy of China’s autonomous territory, reported The Malaysian Reserve.
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At present, death toll over the coronavirus stands at more than 1,700, while those infected are rising towards the 90,000 mark.
However, it is still too early to assess the outbreak’s full impact on the country’s property sales and Lee is positive that the slowdown will be temporary.
“When the coronavirus issue is over, perhaps in six months’ time, I anticipate demand from Chinese and Hong Kong buyers to improve tremendously due to bad experience for those who didn’t buy or own property overseas,” he said.
The Chinese were among the key markets targeted by local developers before, while the political unrest in Hong Kong led its residents rushing to countries like Singapore and Malaysia to buy a home.
Recent reports from Juwai.com, a Chinese international property portal, and Malaysian real estate agency network IQI Global revealed that mainland Chinese buyers bought RM8.4 billion (US$2 billion) worth of properties, which translates to 12.1% of the overall transaction value in 2018.
The amount sold, however, only accounted for 0.4% of the total property transactions.
Nonetheless, Chinese buyers pose a significant multiplier effect because the impact of their investment spreads to other sectors like retail, manufacturing, banking, hospitality, insurance and transportation.
Juwai-IQI likewise disclosed that around RM4.3 billion worth of new residential developments in Malaysia is already targeted for foreigners, including Hong Kong and Chinese investors.
Lee also expects the lowering of the threshold to RM600,000 for foreigners to acquire unsold properties in Malaysia to boost sales. Buyers from China prefer Malaysian properties over that in Singapore due to their lower prices.
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