There is no requirement to buy property under the Malaysia My Second Home programme and some people chose to rent. It is also not essential to join the MM2H programme in order for a foreigner to buy property in Malaysia.
Property prices in Malaysia are quite low compared to many developed countries and because of an explosion in new developments the prices have not risen that much in recent years. The biggest increase has been seen in some of the high end properties, mostly apartments, in central KL. However as the MM2H programme attracts more participants it is reasonable to assume that prices of desirable properties will rise at a faster rate in areas where they choose to live like Kuala Lumpur and Penang.
The quality of construction in Malaysia is generally good although some property companies use low cost finishing on their properties to keep the selling price low. A few people moving here under Malaysia My Second Home have experienced problems with construction companies and legal issues relating to their purchase. This can be avoided. There are plenty of reliable, well established companies in Malaysia and it is the policy of this website to only recommend companies which we feel can provide good value for money and we consider reliable. Additional information can be found in our property website www.propertyinmalaysia.com.
Choosing between apartments and landed properties is a personal choice. The advantage of an apartment complex is that many have quite good facilities and security is better. Landed properties offer your own garden and more privacy. Since home theft is quite common in major cities in Malaysia a security system is advisable if you choose to live in a house.
Beach side developments are rather limited at present and many of them consist of high density apartments. Some companies are looking at building chalet style developments and we will advise people as they become available. A lot of beach front land in Malaysia is Malay reserve land which means only Malays are entitled to own the property.
If you are planning to build your own home make sure you have retained a good lawyer to ensure you have proper title to the land. You should also get reliable references for any builder you choose to use. Make sure you also agree on penalty clauses if the work is not finished on time as delays are common. In Malaysia it is usual to buy new properties “off the plan” which means a wait of up to three years before the property is completed. You have the advantage that with a good developer the price will probably rise during the intervening period but you also have to wait for possession. If you want to buy a new home that is ready for immediate occupancy you will almost certainly have to buy from someone who has already bought off the plan. It is very important to research the developer’s track record if you buy off the plan as some people have found the final product is far removed from the one originally advertised.
If you are happy buying a second hand home there are plenty available and reliable real estate agents can assist you to find a suitable place. Again, you will need to make sure your real estate agent is reputable so that you are getting proper value for money and being charged the correct fees. Property matters generally fall under the control of each State. All foreigners buying property in Malaysia are required to obtain approval from the State government, a process which can take up to six months.
People living here under the Malaysia My Second Home programme (and other foreigners) can usually only buy properties priced over RM1,000,000 each, depending on the location. This is the minimum recommended price set by the Federal Government however land issues are decided by the state so some states set different limits. Penang has a lower limit for Malaysia My Second Homers of RM500,000 and Sarawak sets a lower limit of RM350,000. It’s a good idea to check with a lawyer before committing to any purchase to make sure you are eligible. The logic behind having a minimum pricing is to reduce inflationary pressures on homes purchased by average income Malaysians.
Selangor has the most restrictive policies for foreigners wishing to buy property and even more so for people with the MM2H visas. They can only buy one property which must cost over RM2 million and be strata title which usually means an apartment. Since there are very few apartments over RM2 million this makes it hard to find anywhere to purchase in the state. In addition they require MM2Hers to buy from developers which means they have to buy new properties which usually means committing several years before completion.
MM2H visa holders are eligible to receive loans from local banks subject to meeting their credit criteria. Currently it is difficult to get a loan above the age of 60 and repayments usually have to be completed before the borrower reaches the age of 70.