Version: CN
This article is provided by IQI real estate agents Jean Tay and Nazry Nordin.
Did you know that “Malacca” has been searched 300 million times on WeChat in China and becoming a trend recently?
The Malacca state government expects that this trend will attract 1 million Chinese tourists to Malaysia, boosting the local economy and tourism industry.
Since Malacca is being discussed internationally, is now a good time to invest in property there?
In this article, we have Jean Tay and Nazry Nordin, real estate negotiators from IQI who experts in the Malacca market, share their thoughts and advice on investing in Malacca.
Everything about Malacca’s Property
1. Malacca has lowest average house price in Malaysia
According to the latest data from National Property Information Centre (NAPIC), the average housing price in Malacca is only RM207,600 as of Q3 2024.
This makes Malacca the state with the lowest housing prices in Malaysia over the past four years!
Malacca’s housing prices are not only lower than most affordable condos in the Klang Valley, but they are also cheaper than homes in nearby towns like Muar and Seremban.
The national average house price during the same period was RM458,751, so Malacca’s homes cost just 45% of that.
Think about it, you could own TWO houses in Malacca for the price of ONE elsewhere.
Additionally, landed property in Malacca has seen a significant rise over the past five years, jumping from RM399,000 in 2019 to RM550,000 in 2024.
If you were a savvy investor who purchased a landed property in 2019, you would have already seen an increase of RM150,000 in value.
For those who missed the opportunity, property values in Malacca are still increasing, so it is not too late to begin investing in Malacca’s real estate!
2. Flexible Airbnb Rules in Malacca
With the arrival of tourists, both local and international, the Airbnb market in Malacca has experienced steady growth.
Unlike in some other states in Malaysia where running Airbnb services is illegal, Malacca has more relaxed rules for Airbnb.
For example, in Penang, property owners can only run Airbnb services if their properties have a commercial title under the Housing Development Act (HDA).
However, residential titles don’t qualify.
In Malacca, whether your property is residential or commercial under the HDA, you can rent it out on Airbnb.
Just remember, before starting your Airbnb business, you’ll need permission from your neighbors on both sides.
This straightforward process encourages property investors to list their properties on Airbnb.
It is a fantastic opportunity to earn significant short-term rental income during peak tourist seasons.
So, which property attracts Malacca investors the most?
In Malacca, a wide range of properties are available for Airbnb, including condominiums, service apartments, terrace houses, semi-detached houses, and bungalows.
But which type of property do tourists prefer the most, and consequently attracts Malacca investors?
Bungalows with swimming pools are highly favored because renters who come with large families enjoy having this facility.
Undoubtedly, a swimming pool is a key attraction for Airbnb guests.
Spacious properties that can accommodate up to 20 people is definitely ideal for family gatherings or team-building events.
3. Land Reclamation Drives Property Demand
The Malacca reclamation project is currently underway at the Straits of Melaka.
This ambitious project will add around 1,300 hectares of new land for development.
One major initiative is the Melaka Waterfront Economic Zone (MWEZ), which covers 25,000 acres of reclaimed coastal land.
MWEZ plans to turn this area into a vibrant hub that combines business, tourism, education, and residential life.
Meanwhile, it also creates numerous job opportunities for locals and foreigners and enhances rental stability in the area.
As a result, land reclamation has significantly increased demand for both commercial and residential properties in the region.
If you’re considering investing in Malacca, now is undoubtedly the best time!
4. Ideal Retirement City for Foreigners
Many locals see Malacca as their ideal retirement city because of its laid-back lifestyle.
But did you know that Malacca is also attractive to foreigners seeking a peaceful retirement life?
In addition to its relaxed pace of life, the cost of living in Malacca is relatively low compared to other states in Malaysia.
An example of a foreigner moving to Malacca is Saira Hayati, a TikToker from the United States.
She discovered Malacca’s relaxed lifestyle during a visit and fell in love with it.
Then, she approached Nazry to purchase property and settle down in Malacca.
MM2H Program (Updated in 2024)
Exciting news for foreign investors!
In June 2024, the Malaysian government revised the Malaysia My Second Home (MM2H) program requirements.
This program offers extended visas to foreign nationals, allowing them unrestricted entry and exit from Malaysia.
The updated requirements aim to attract wealthy individuals who can make positive economic contributions, particularly through property investment.
At the same time, it appeals to retirees seeking a cost-effective and tranquil place to enjoy their retirement.
Now, the application process for the MM2H program has also become simpler for foreigners!
5. Is Malacca a popular choice for local investments?
Foreigners see it as a good option, but are locals thinking the same?
Yes, locals also invest in property in Malacca!
Many locals opt to purchase homes in Malacca for retirement, foreseeing that property prices in the region may become less affordable in the next 10-15 years.
With relatively low prices, they can enjoy the amenities, relaxed lifestyle and scenic beauty that Malacca offers.
There’s simply no other retirement investment spot in Malaysia quite like Malacca, which is why both foreigners and locals love it!
6. What areas should investors consider?
You may have made the decision to invest in Malacca, but which parts of Malacca are suitable for investment?
Let me give you some ideas!
- Tourist area
If you’ve visited Malacca, you’ll know that tourist spots in Malacca are always busy on weekends and holidays.
Investing in properties in tourist areas could attract many tourists looking for accommodations near attractions.
Walking also helps you avoid heavy traffic jams in town!
Plus, these areas have good amenities like transportation and stores.
- Industrial area
Other than tourist areas, properties in industrial area are also worth investing in.
Due to the ongoing expansion and construction of factories, property transaction volumes in Malacca’s industrial areas are high.
Each new factory brings a surge of job opportunities, so does the number of workers, driving up rental rates.
In industrial areas, the rent for an unfurnished three-bedroom property is about RM800 to RM1000, while a furnished one rents for RM1000 to RM1500.
An added bonus for investors is the high rental stability in these areas. Since industrial jobs are relatively stable, tenants tend to opt for long-term rentals.
This means that buying a house in an industrial area ensures strong rental demand and a steady rental income.
- Properties near toll roads
Another area worth considering for investment is properties near toll roads.
This type of property offers significant transportation benefits, linking Malacca to major states like Kuala Lumpur, Johor, and Singapore.
Living near toll roads in Malacca makes travel easier and greatly reduces commuting time, which is ideal for frequent travelers between Malacca and other cities.
This advantage also enhances property value, making it a potentially successful investment!
Below locations are near to tolls roads:
- Ayer Keroh
- Krubong
- Cheng
With the strong support of the Malacca government, more people are expected to come to Malacca for investment, travel, and possibly to enjoy their retirement life.
Such good news for the Malacca property market!
This article is provided by IQI real estate agents Jean Tay and Nazry Nordin.
Jean is a senior real estate agent at IQI with 20 years of real estate investment experience. She has been ranked as a top secondary sales agent and selected as one of the top 10 agents for exploration in the primary market in Malaysia. Jean mainly serves various areas in Malacca, Kuala Lumpur and Selangor.
Nazry is a trainee real estate agent with 6 years of industry experience. Currently serving as a team leader, he mainly focuses on the primary market, especially in the Malacca area.
If you need advice on property investment, whether in Malacca or elsewhere, IQI real estate negotiator can assist you!
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