Understanding The Malaysian Property Market And House Prices

As the Malaysian government provides clarity in its fiscal policies, the residential housing market is seeing more motivated sellers and discerning buyers.

Foreign investors continue to also look into investing in Malaysia’s residential properties. All thanks to the country’s liberal policies enabling foreign investment, reasonable valuations and no extra stamp duties.

Here’s a quick guide if you’re thinking of buying a home in Malaysia

What’s The Malaysia Property Market Like?

Rather than renting, it’s actually more profitable in the long-run to buy homes in Malaysia.

This is especially with the recent announcements surrounding rent-to-own (RTO) home ownership solutions by developers who have partnered with banks.

As of right now, the government is encouraging young people in particular to buy, with low cost loans available for first-time homeowners.

However, the process of buying a property takes time, which means that some people still prefer to rent as a quicker route to getting their housing sorted.

What’s The Approximate Cost Of Different Properties In Malaysia?

If you’re thinking of buying a property in Kuala Lumpur, for example, the house price you pay will be influenced significantly by where you want to live.

Famous neighbourhoods include Mont Kiara, Sri Hartamas, Subang Jaya, KLCC, Taman Tun Dr Ismail (TTDI), Cheras and Bangsar.

Prices of properties in these areas start from RM800,000 and can go up to RM3,000,000 (depending on the property type).

Link houses start from RM1,500,000 (basic units that require renovation).

How Do I Choose The Right Property?

1) Property Types

The Klang Valley has a well-developed real estate sector. This means you'll have a wide choice of apartments, houses, or even land if you want to build your dream home.

The most common property types in these areas are:

• Condominium/apartment – a block with facilities like a swimming pool, tennis courts and gym.

• A flat – a simple residential block without all the additional facilities a condominium offers.

• A terrace house or link house – the most commonly developed residential property.

• A bungalow – detached property (can be single or multiple stories).

2) Condition Of The Property

It’s a smart idea to always get a valuation done for the property you choose, before you commit to buying it.

Valuations carried out by banks are common as the fees are tied to the loan when approved, and there are a handful of banks that still carry out the valuation without any cost.

The bank you choose as your home loan lender will also insist you have a survey completed before confirming the home loan offering.

What Are The Legal Requirements To Buying A Property In Malaysia?

It’s essential that you hire a good and trustworthy lawyer to help you with your purchase, as the rules for buying property in Malaysia vary (whether it is your first, second or third property).

They’re also reviewed and altered regularly, as and when the government sees fit.

For foreigners, some categories of property cannot be purchased, therefore foreigners will need a specialist to help you understand what options are available to you.

How Do I Get A Home Loan?

To make a purchase, you’ll have to either have the full payment made upfront or pay a minimum 10% of the value of the property as a down payment. The remaining 90% of the value can be financed by the bank.

The four largest and popular banks are Maybank, CIMB, Public Bank Berhad and RHB. These banks offer home loan products; however, each product will differ slightly.

You should also keep in mind that there are different types of property loans in Malaysia so you can be sure to find the one that’s right for you.

Now’s The Time To Choose A Bank!

When you’ve chosen the home loan that works best for you, you’ll need to make your application. Typically this will mean that you have to prepare a stack of paperwork, and meet with the bank’s loan officer in person.

Each bank will operate slightly differently, so call your local branch to check if you need to make an appointment in advance.

It’s worth getting a home loan secured before you go too far with your property search, as this will give you a more solid idea of what you can afford.

What Kind Of Other Taxes and Fees Will I Need To Pay?

The charges are regulated and based on the cost of the property being sold. Once you add up all of the fees you’ll have to pay as a buyer, you can expect to add around 4% of the house price onto your bill.

Fees and taxes include:

• Stamp duty (paid by the buyer): 1-3% of the purchase price.

• Solicitor fees: Usually 0.4–1%, depending on the circumstance.

• Other administrative fees: around RM300, which includes search fees and other assorted admin charges.

• Real estate agents fees: These might be paid by the seller or buyer, and are regulated depending on the property cost. Typically they’ll be under 3% of the purchase price.

Buying a property is a big and exciting step, but navigating the system can be a challenge. Luckily, buying your dream home in Malaysia should be fairly straightforward once you figure out how it works. Read more on the 6 factors to consider when buying a property in Malaysia to get you started on the right foot!