GE14 not a deterrent to Chinese investors, says Juwai.com

This article first appeared in The Edge Financial Daily, on May 3, 2018.
-A +A

KUALA LUMPUR: China-based online realtor Juwai.com says Malaysia’s upcoming 14th general election (GE14) has not been a deterrent to Chinese investors as overall demand has actually increased year-on-year (y-o-y).

Juwai.com chief executive officer Carrie Law said Chinese buyer inquiries about Malaysian property in the first quarter of 2018 increased 102.8% year-on-year.

While inquiry numbers in April may be about 10% to 12% lower on a month-on-month basis, she expects inquiries to be 80% higher when compared with last year’s corresponding period.

“Most Chinese accept at face value when the news reports suggesting the ruling coalition will remain in power. The continuity in leadership is taken to mean continuity in policies and investment trends,” she said.

Law added that the stability in leadership provides comfort to Chinese buyers, both for the investors and owner-occupiers.

“If the opposition wins, buyers motivated by pure investment may hold back to see how events play out. However, most buyers are purchasing in order to study in Malaysia, work here or retire here.

“They will continue to buy as long as visa and education policies remain favourable,” said Law.

Although Chinese real estate demand in Malaysia started from a low base, Juwai.com noted that demand has doubled on a y-o-y basis every quarter since January 2016, adding that Chinese buying inquiries have more than tripled since 2015.

It also pointed out that Chinese demand for Malaysian properties overtook the demand for Singapore properties in 2017, as Malaysia was ranked ninth in terms of country of choice for Chinese property buyers while Singapore was ranked 12th.

The demand has been relatively concentrated in three cities, namely Kuala Lumpur, Johor Baru and Melaka, with Kuala Lumpur accounting for 40% of all buyer inquiries year to date.

Compared with other countries in the Southeast Asian region, Juwai.com said Malaysia attracts more buyers from China that are purchasing for their own use.

Based on a survey done in the first half of 2017, about 58.5% of respondents said they were interested in purchasing property for their own use.

Looking ahead, Law expects Chinese investment in Malaysian residential properties to double by 2025, if the current trend persists.

Meanwhile, she said a significant portion of Chinese investments going forward will be in infrastructure related to the Belt and Road Initiative (BRI), such as trains, ports and industrial zones.

“Because Malaysia is a BRI country, many Chinese believe investing is less risky than other nations,” said Law.

Overall, Chinese international real estate investments surged from US$5 billion in 2010 to a record US$101.4 billion in 2016.

Juwai.com expects Chinese international investments to continue growing after dipping slightly in 2017.