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Regional property in Malaysia has avoided boom and bust

Although interest from foreign property investors in Malaysian properties has slowed down in the last six months following the global financial meltdown, there are still investors who see potential in the market and are looking for value buys.

The fact that local properties have not appreciated drastically in the past few years like those in countries such as Singapore and Hong Kong, has turned out to be a blessing, some are pointing out.

Property prices in Kuala Lumpur and other parts of the country are much lower than those in other neighbouring high-cost cities. Relatively speaking, the local property market is more stable and resilient than in other parts of the world, partly due to the fact that the country has not been severely affected by the global crisis.

Yu Kee Su, executive director of Malaysia Property Inc, says that low capital appreciation in the regions has actually made them a more stable market for real estate investors.

As property prices have not escalated in a frenzied manner over the last few years, the threat of an oversupply has been kept in check. 'Malaysia is not suffering from any sharp price decline. The shortcomings have indeed become a blessing in disguise for Malaysian properties,' he added.

According to the International Real Estate Federation properties in Malaysia are five times cheaper than those in Europe because of competitive exchange rates against the euro. Its members report that food, lifestyle, culture and heritage makes the country interesting for foreign buyers are who are mostly from South-East Asia, Europe and the Middle East.

'As the Middle East, especially Dubai, is overheated and overbuilt, investors will look at other countries such as Malaysia to average out their risks. Besides, senior lifestyle relocations are gaining popularity in Japan and South Korea,' said the federation's vice-president for marketing and networking Michael Geh.

Overall property prices in Malaysia have fallen around 10% to 15% since the fourth quarter of last year, while the medium to high-end market is holding out better.

Meanwhile, markets in Singapore, Vietnam, India and China have seen price falls of 20% and 30%.