SINGAPORE (Sept 2): With the ringgit plumbing record lows against a basket of weighted currencies, especially the Singapore dollar, there is no better time for Singaporeans to invest in Malaysian properties, says founder and CEO of MoneySmart.sg, Vinod Nair.
"The confluence of a strongly regulated Singapore property market where prices are still not tapering to significant lower levels, and a much cheaper ringgit, is in effect payday for Singaporeans and Singapore residents with limited funds [who] now be able to buy luxury properties in key Malaysian cities like Kuala Lumpur, Petaling Jaya and Penang," he told Bernama today.
Vinod said the topline property categories to consider would be luxury condominium developments in Kuala Lumpur's central business district and landed property in posh enclaves such as Bangsar and Damansara Heights.
When asked about properties in Iskandar Malaysia, where Singaporeans make up a big chunk of investment there, he said he expects "the Iskandar master developer and private developers taking further steps to draw overseas buyers with much more deregulated measures and friendlier tax laws".
He added that foreign direct investment is a powerful tool for Malaysians to hedge against the ringgit.
"If the cost of buying Malaysian property is reaching record lows, then an eventual currency correction -- which will eventually happen -- may slow down property sales.
"Iskandar Malaysia does have a lot of unsold developer units so now is the perfect time to offload inventory.
"Ultimately for Iskandar and all of Malaysia, now is the time to review the capital gains tax -- maybe a reduction or a temporary reprieve might be an
excellent idea to attract buyers," he said.
Following the weakening ringgit, some investors have expressed concern about their investments in Iskandar Malaysia.
However, Vinod says Malaysia is still an attractive investment destination for property buyers.
"For those already invested, the best advice would be to wait out this bad period. I don't envision the federal government of Malaysia rolling out capital measures like cash injections or pegging the ringgit, so really this is an exercise in patience for existing investors."
On whether the recent Bersih rally in Kuala Lumpur would affect investment levels, he said: "The recent Bersih event over the weekend, as it has always been historically, was a peaceful, non-violent protest of the federal government's policies.
"I believe the only direct immediate effect would be on tourism and tourist arrivals. In the long run, the movement is really a domestic rally to improve on transparency and reduce corruption. This is a positive light on Malaysians wanting a better country for themselves," he added.