After nearly a decade of preferring to invest in Singapore and Australia, savvy Singaporean investors are now setting their sights on Kuala Lumpur and London, said Tim Murphy, Founder and Managing Director of IP Global.
With Malaysia’s economy expected to expand 5.3 percent this year and London’s economy predicted to grow 3.8 percent between 2010 and 2012, many investors are expecting to benefit from an active economy, as well as strong rental yields of about five percent in each market.
“Malaysia is a steady market. There is lots of foreign money heading into the country, especially from China and the Middle East,” said Mr. Murphy who spoke to PropertyGuru.
He said that the Malaysian property market was boosted by “owner occupiers and domestic consumption and not pure rampant speculation, like many parts of Asia.”
Malaysia is becoming a prime investment location in Asia due to its property market and relative affordability. Many investors across the region are looking to diversify their portfolios with affordable, mid-range property and the country’s well regulated market is attracting investors looking for long-term and secure investment opportunities.
Meanwhile, London continues to attract interest from foreigners with its favourable exchange rates.
“Singaporeans should take advantage of weak markets and look at freehold and leasehold properties in cities like London,” said Mr. Murphy.
Property prices in London remain below the 2007 peak despite the recovery in the property market following the recession. A serious shortage of supply can also be seen in the UK, with an average of 4.5 tenants competing for each property.
Meanwhile, rental rates increased 15 percent between June and September 2010, the highest level seen in any region. This, in turn, has delivered healthy returns on capital investments and interest rates remain extremely low, a positive indication for the property market.
“Low interest rates and high rental yields will continue to offer strong value over the next 12 to 18 months in London. In addition, non-UK residents also avoid capital gains tax — calculated by the profit realised on the sale of a non-inventory asset that was purchased at a lower price — making London very appealing for Singapore investors as a medium to long-term investment,” he said.
Mr. Murphy also advised foreign investors to “understand overseas tax regimes and go into places where the legal titles are clean and there’s no hindrance to foreign ownership.”