Malaysia has become a popular choice for Hongkongers looking for a safe haven, on the back of the long-running social unrest in Hong Kong.
In fact, exhibitions featuring properties from Malaysia have been jammed with Hong Kong people, while most emigration consulting agencies witnessed a spike in enquiries about the MM2H (Malaysia My Second Home) programme.
Under this emigration initiative, applicants can obtain a 10-year residence permit without being required to move and live in Malaysia. The cost of investment is also “incredibly low”, said Raymond Chong, managing director at mortgage referral brokerage firm StarPro Agency, in a South China Morning Post article.
“The permit is for people who not only want to keep their Hong Kong business and assets, but also want a back door available. You can leave for a while no matter what happens and come back to Hong Kong when things look settled or resolved,” he said.
“As a matter of fact, most of us do not want to permanently relocate to another country, but as the political chaos is getting more serious, having a “Plan B” is the rational thing to do especially for the sake of kids.”
Chong noted that while most emigration consultants encourage their clients to purchase a unit in a condominium development to obtain the MM2H permit, there is another way of securing the permit.
“To get a 10-year residence permit through MM2H, applicants under 50 years old simply need to deposit HK$600,000 (RM318,987.50) in a Malaysian bank in order to satisfy the capital requirement. Applicants over 50 barely need to deposit HK$300,000 (RM159,493.75).”
Property owners in Hong Kong can also secure the MM2H permit at zero cost by refinancing their mortgage, he said.
For instance, an owner of a HK$7 million (RM3.7 million) flat in Hong Kong, with an existing mortgage of HK$3.6 million (RM1.9 million) can refinance his mortgage to another bank, and cash out HK$600,000 (RM318,987.50), which he can transfer to his Malaysian bank account as time deposit.
And although time deposit is sufficient to meet MM2H’s investment requirement, many Hongkongers still prefer to acquire a house within Malaysia as a hedge against inflation rather than holding deposits.
During a visit to Malaysia, Chong discovered that second-hand homes offer better value for money compared to new properties mainly featured at property exhibitions in Hong Kong.
He revealed that a first-hand property near the Petronas Twin Tower can go for HK$4,000 (RM2,127) to HK$5,000 (RM2,659) per sq ft (psf), while a nearby second-hand property can be priced at HK$1,500 (RM797.74) psf only.
“Therefore, if you want to buy a Malaysia property as a means for MM2H, look into the second-hand property market but not just the first-hand market,” advised Chong.
“Similarly, you can opt to refinance your flat in Hong Kong to draw cash to purchase of a property in Malaysia. Even if the cash-out amount is insufficient to pay off the property, you can mortgage the rest at a local Malaysian bank. Alternatively, you can get this loan from HSBC Bank Malaysia if that would give you more confidence,” he added.