Malaysia is tipped to experience increased interest thanks to its safe haven status.
The unexpected political events of 2016 of Brexit (Britain voting to leave the European Union) and Donald Trump becoming the next president of America may impact Malaysia’s property market in a positive way. Both the UK and the US are deemed to be safe havens where many investors park their money in the form of buying property. The stable economy, the transparency of the legal systems and the political stability of these two nations determine their safe haven status.
However, the latter requirement has been jittered with the shock results in the UK and across the pond. 2017 could see a new wave of safe havens and/or requirements as to constitutes a safe haven. This could strengthen Malaysia’s already strong reign as the Asian safe haven.
The country’s appeal already exists thanks to its transparency and economic growth, although it can be argued that the country does have political concerns that could deter some investors from dipping into this market. However Malaysia’s low interest rates are already drawing in investors as access to funds is straightforward and the cost of borrowing is quite low.
The sentiment across the market is that Malaysia’s economic environment is ideal for foreign investors. Plus the country on the whole is relatively affordable, particularly when compared to its counterparts in the region such as Singapore. In July of this year, the overnight policy rate (the interest rate for day-to-day liquidity) was decreased to 3 percent, a reduction of 25 basis points. Triggered as a reaction to news of Brexit, this may lead to other banks reducing rates and thus making lending even more affordable, pushing Malaysia to the top of investors’ agendas.
