Malaysian developers face increasingly stiff competition to sell to Singaporeans as other overseas developers rush in to market their properties in the rich city state.
The Singaporean love affair with overseas property is showing no signs of letting up. Last weekend alone there were eleven separate exhibitions in the city state, all vying for the hearts and minds of what is certainly an increasing number of potential buyers and investors.
Tempting buyers last weekend were properties from Australia, China, the United Kingdom and the United States and of course Malaysia where one project from Petaling Jaya and two from Penang were being exhibited.
There are no official figures which detail exactly how many Singaporeans are investing in overseas property, but judging from the six exhibitions that I attended last weekend, the numbers are on the uptrend. The fact that one London project - Chelsea Creek - opted to have its world exclusive launch in Singapore speaks volumes, and the fact that Kuala Lumpur is the next stop for this West London development is testament to the importance that overseas developers are placing on buyers from Southeast Asia.
For most Malaysian developers, the challenge is to grab the attention of potential Singaporean buyers who are faced with many overseas buying opportunities and an even greater number of local choices.
One obvious attraction is proximity, a factor that's especially important for investors who want to keep a close eye on their asset. I've heard several examples where Singaporean buyers of US property have been called in the middle of the night - daytime on the other side of the world - by their tenants with maintenance or other property-related issues.
I think it's fair to say that if the Malaysian government implements its RM1 million entry price point for foreign buyers, it will drive Singaporean buyers to look at alternative destinations for their property investments. Competition, as evidenced by last weekend's exhibitions, is already intense.
Price-sensitive and value-conscious buyers will likely give more consideration to neighbouring Thailand, and even perhaps shift their attention towards Indonesia where the government is presently mulling a relaxation of the country's foreign property ownership laws.
The Rice Miller development in the heart of George Town in Penang was one of the three Malaysian developments showcasing its luxury hotel and residences project in Singapore last weekend.
Hans Amin Schlereth, Assistant Manager of Property Development and Marketing for developer Asian Global Business Sdn Bhd, told me one of his biggest challenges is selling Penang and what the island has to offer. "We're selling Penang as much as we're selling our project," he said. The 99-unit residences in the UNESCO World Heritage site is 65 percent sold, with two-thirds of buyers to date coming from outside of Malaysia.
For now, Malaysian property remains attractive, but for how long?
Perhaps one indication of how Malaysia will face increasing competition in the coming months and years came from Janice Low De Yean, Regional Sales Director for Centaline Property Agency. Her company was showcasing a commercial property development in Chengdu, China, and it was literally buzzing with interest amongst Singaporeans.
"There is a lot of pent-up demand from Chinese developers who want to attract Singaporean property buyers and investors," she said, adding that her company - one of the largest real estate agencies in Hong Kong, has lined up developers from China, Hong Kong, Macau and Taiwan for similar Singapore property road shows.
It's clear that as interest from Singaporeans in overseas property grows in tandem with the number of overseas projects targeting Singaporeans, Malaysian developers will face increasingly stiff competition.
Any changes to the foreign price limit are unlikely to help, while selling the country is going to be as important as selling a specific property investment opportunity.
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