Malaysia, a country known for its natural beauty - is fast mapping its presence on the world economic map. The government is going all out to woo foreign investors and last year re-launched the "Malaysia - My Second Home’ program, encouraging outsiders to invest in Malaysia.

Malaysia - a country of many cultures, wonders and natural attractions, is located in South-East Asia. Famous for the Petronas Twin Towers - the tallest building in the world, when they first came up in 1998; they remain the world's tallest twin buildings. Also located here is the KL Tower, the fifth tallest tower in the world. Malaysia is also well-known for its fascinating landscape and greenery and it boasts some of the best beaches and diving spots in the world. Malaysia with its tropical climate, has temperatures averaging 30°C and enjoys sunny weather almost the year round.
Malaysia topped the list of the most popular long-stay destinations in the year 2006. (according to the 2007 statistical survey of the Long Stay Foundation of Japan)
Formerly a British Colony, the English language is most universally spoken here. Other languages that are commonly spoken are Malay, Chinese, Tamil and Telugu. In fact, out of Malaysia's total population of 24.8 million; 9-10% constitutes Indians, predominantly south Indians with roots in Tamil Nadu, Andhra Pradesh, Kerala or Karnataka.
The state's economy is largely driven by the electronics and hospitality industries, but today the property sector is emerging as an important activity. Many new real estate projects are underway, or on the drawing board. Presently Malaysia has a GDP amounting to over 300 billion euros.
Experts have forecast a rapid long term economic and tourism growth for Malaysia. This has been given further impetus by the fact that - 2007 was 'visit Malaysia year'.
Compared to most other Asian countries, Malaysia is a relatively economical and hassle-free place, where foreigners can own quality property, with low down payments.

Government Initiatives
The country enjoys a low inflation rate. The cost of living in Malaysia is also exceptionally low. The Malaysian Ringgit is currently struggling to keep up with other currencies, which is why commodities and housing is cheaper here.
The government has kept taxation at a minimum with no inheritance tax and no capital gains on assets. The costs of property maintenance and management fees are also generally low, as labour costs are inexpensive.
In 2006 the government banned short-selling and ever since foreign interest in properties here has been on the rise. Homes are sold relatively lower than expected, with the intent to boost the inflow of foreigners bringing pounds and dollars.
The government is also going all out to provide more opportunities for business and employment for outsiders. In fact the Malaysian government is doing a lot towards providing for the needs of expatriates.
Expatriates and foreign investors can find employment in Malaysia relatively easily. Especially so, if their specific fields cover business, technology, trade and the stock market, most companies are willing to hire immediately. There are also a number of business owners who are looking for partners to start companies and prototypes. Banks also give loans for housing and business to outsiders at attractive rates.
The government provides other facilities to foreigners for example buying new cars or items are not taxed, including the ones brought from outside the country.
There are thus a number of factors that make Malaysia an attractive investment destination for real estate.

Housing Costs
Looking at housing costs, Malaysian housing costs are low even in big cities like Kuala Lumpur. One can enjoy more space at very affordable rates in medium-sized homes or two-bedroom apartments. Apartment rentals average around 100 to 150 euros (approximately Rs 5500 to 8500) every month. House rentals are in about the same range.
Presently expatriates are looking towards quality apartments and condominiums deep in the heart of the city. These are currently in shortage, but the Malaysian government is actively making efforts to quickly make up with the intent to increase the influx of foreign investors. At present, the country wants more foreign investors to own land and property which can help boost overall GDP and the real estate market. Penang and Johor are two areas that along with great scenic locations have very exceptional rates on rental and ownership.
Since the relaxation of residential ownership rules for foreigners and the real property gains tax (RPGT) waiver, high-end residential properties in Malaysia have attracted interest from abroad.
The changes initiated by the Government, which were targeted at stimulating property activities in the medium- to high-end segment, have thus far mainly benefited the high-end segment of the market.
Developers with ongoing developments have in the last year raised selling prices by 5% to 100% year-on-year from their launch prices.
It is expected the pricing gap between mass market and high-end residences in Malaysia would continue to widen. This is in line with the regional phenomenon, as petrodollars and stock market wealth continue to have spill-over effects on property demand in Malaysia, as prices remain cheap vis-à-vis regional peers.
Within the country prices are moving upwards and especially around the KLCC vicinity, there has been a spike in land prices. The current high-end residential prices are sustainable and may continue to set new records as long as the political and economic climates of Malaysia and the world remains favourable, and Malaysia remains business friendly.
Unlike typical residential investments which require investment returns (in the form of rental), the high-end residential game plan differs, with surplus liquidity in the world. Buyers of these properties have varying reasons for such purchases - speculation, prestige, address, excess cash, and status, to name a few. Thus the price rise in the upper hand is expected to continue.
Some great areas where foreigners can buy property besides urban areas, are those in Kota Kinabalu, Kuching, Kota Baru, parts of Penang, Cherating and the Iskandar Development Region in Johor.

Hot Spot - Penang
The scenic beachside town of Penang, situated in the northern peninsular of Malaysia, is on the verge of a property boom. With the entrance of major Klang Valley-based developers like SP Setia Bhd, E&O Property Development Bhd, Mah Sing Group Bhd, IJM Properties Sdn Bhd and Sunway City Bhd, the landscape of Penang's property market is set to change, where locals will enjoy better designs and concepts.
The impending roll out of infrastructure projects under the Ninth Malaysia Plan (2006 - 2010) has been a boon to the real estate sector as new areas opened up for development. Tan Sri Liew Kee Sin state was allocated a RM 6.6 billion development budget for various projects, including the second Penang Bridge, Penang Outer Ring Road (PORR) and monorail project.
If the projects are implemented, as conceived in the holistic infrastructure master plan, upgrading the state's road and transportation, connectivity will be a big spin off to the state's economy. "Places near the site of the second Penang Bridge are also coming alive with renewed interest from developers. More developed areas in the southern part such as Sungai Ara and Bayan Lepas will continue to attract keen interest due to its proximity to the airport and free trade industrial zones," SP Setia group managing director Tan Sri Liew Kee Sin is quoted to have said in StarBiz.
E&O Property Development Bhd marketing and sales director K C Chong said the 9MP projects would benchmark Penang to be on par with some of the world's more modern cities. A number of factors have contributed to Penang's "hot" property status - strong property demand and prices, high urbanisation rate and a household income that is above the national average. Mah Sing president Datuk Leong Hoy Kum said Penang's "nostalgic charm" had endeared it to the people, including foreigners and Penangites who resided outside the state.
"Its island state appeal makes Penang a natural tourist attraction and it is no wonder that the state tops the list in attracting participants of Malaysia, My Second Home (MM2H) programme," Leong said.
Indians Investing
Many Indians too are now looking towards Malaysia. In the last two years, more than 500 Indians, a number of whom are said to be agriculturalists from Chandigarh and the northern region, have registered themselves for the 'Malaysia my second home' (mm2h in short) venture, that has been initiated by the Malaysian government.
The Malaysian government had introduced Malaysia My Second Home (MM2H) program in 2004 as an international residency plan to allow foreigners to reside in the country on a long-stay visa of up to 10 years, renewable. Certain financial and medical criteria need to be fulfilled to qualify for the program.
Such long-stay programs by the government has helped boost interest in long-stay residency. Last year the government re-launched this program under the initiative of the Tourism Ministry.
Under the scheme, the Malaysian government allows tourists to invest in the country's real estate market. All you have to do is pick a home (either in the heart of the city or an island), pick your price (upwards of Rs 18 lakh) and you have a home for yourself. The scheme however forbids individuals to lease their property or conduct any form of business from that location. But the attractiveness is the possibility of capital appreciation and the fact that you can live in your own home when you are holidaying in Malaysia.
According to Noor Arif Mohd.Noor, director of Tourism Malaysia the mm2h scheme has been a huge success. Looking at the number of Indian tourists that visit Malaysia - 225,000 tourists in 2005, 279,000 tourists in 2006 and about 400,000 in 2007 - the Malaysian Tourism board is all upbeat about the response that is likely to come its way from the Indian consumer.
They expect the mm2h scheme to rope in anywhere between 3,000 and 4,000 Indians in the next three years. The Reserve Bank's recent move to raise the ceiling for resident individuals to invest abroad from $1 lakh to $2 lakh is expected to help towards this. Says Arif that the greatest success of this scheme in India has been in South India, noting that south Indians share a great affinity with Malaysia. Also, the Malaysian Tourism board is looking at marketing its product to niche markets such as the IT Industry.
"What we are looking at is a concept where real estate helps boost the tourism industry. Given the large disposable incomes of people in India and the growing urge of a holiday destination, we are confident that the response from India will be tremendous," said Ari

Factors that make Malaysia an attractive investment destination for real estate.