The unique geographical advantages of Perak have laid the solid foundation of its thriving real estate industry. The state is poised to steal the limelight in the real estate market over the next five to ten years.
The state of Perak is strategically located in the middle of Peninsular Malaysia. The availability of land, coupled with a strategic location and well established transportation network, direct KTM Komuter access to Kuala Lumpur and well-famous limestone hills, hot springs dotting the surrounding landscape, lush greenery and mouth-watering local culinary delights, Perak is destined to become a powerful magnet that draws sightseers and investors alike.
Thanks to such advantages, the Real Estate and Housing Developers Association (REHDA) Perak chairman Tony Khoo Boon Chuan feels that Perak is an excellent place for vacation as well as retirement. He believes the state will emerge as a primary real estate investment designation over the next five to ten years.
From what he understands, during the past ten years, other than local buyers, the properties in the state have also been snapped up by investors from other states, Perakians working outstation and foreign buyers, including many participants of the Malaysia My Second Home (MM2H) program.
“Compared to Kuala Lumpur, Selangor or Penang, Ipoh has the advantage of being a scenic hill town boasting breathtaking scenery, excellent local food such as dim sum and an abundance of hawker centers ranging from the more affordable to chic establishments. Living cost is not too high here and the traffic congestion omnipresent in other major cities in the country is less severe here. Ipoh is absolutely an ideal place for resort home investment as well as for retirement.”
The vibrant surroundings
Touching on the prospects of real estate in several economic corridors in the state of Perak such as the Southern Perak Economic Corridor, the Northern Perak Economic Corridor and Bandar Meru Raya, Khoo feels that the city of Ipoh as well as its surrounding areas are the most vibrant and attractive destinations for real estate development.
Given the vitality of the Northern Corridor Economic Region (NCER) that encompasses the Taiping-Kamunting High Tech Industrial Zone, offering strong stimulus to real estate development including four-star hotels and large shopping malls, the state government is also placing its emphasis on infrastructure development of the area, and has earmarked RM18 billion to turn the area into another real estate boomtown in Perak.
Unfortunately the slowing global and national economy has taken its toll on the demands for property units in the state of Perak since the beginning of 2015. This, coupled with the federal government’s measures to cool down the overheated property market and credit crunch, have caused many buyers to face difficulty in securing financial loans. Nevertheless, the newly introduced property guidelines by the state government have been very favorable to real estate development. Khoo believes that the state of Perak still holds much prospect in real estate development.
Compared to the neighboring states of Selangor and Penang, Perak has the added advantage of relatively affordable land prices, which gives it an edge in real estate investment. Under the new property development guidelines, the land conversion fee charged by the state government has been reduced from 25% to only 10%, which is remarkably lower than that charged in Selangor and Penang at 50% and 30% respectively.
In the meantime, the bumiputra holding rate for property projects has been revised from a rigid 30% to a more flexible 0 to 50% depending on the racial make-up of a particular area. This is invariably a good news for property developers.
In addition, under the new housing guidelines, the state government will also readjust the ratios for various housing types in a development project, thus allowing the developers to build housing units that will meet the market demands based on their own development plans. This also augurs well for property sale.
Generally speaking, REHDA Perak is of the opinion that there is still ample room for improvement for the state’s real estate industry given its land cost advantage, ample natural resources, abundant supply of quality river sand and relatively cheap manpower.
Housing type requirement prior to the revision of housing guidelines.
|Housing type requirement prior to the revision of housing guidelines|
|Housing types||percentage (%)|
|Housing type reuiqment after the revision of housing guidelines|
|Housing types||percentage (%)|
|No price restrictions||50%|
Malaysia My Second Home Program
Malaysia My Second Home (MM2H) Program is an initiative by the Malaysian government to allow foreign citizens meeting specific requirements to be granted multiple-entry visa permits to stay in the country.
One of the pre-conditions to apply for the Malaysia My Second Home Program is to purchase properties meeting the lowest price requirements set by the respective state governments.
Although the Malaysian government has set a minimum of RM1 million in real estate investment for MM2H applicants, the bottomline is much lower in Perak, as a foreigner only needs to purchase a property priced above RM350,000 to qualify for this program.
Please visit the MM2H official site at http://www.mm2h.gov.my for more information.