The outlook for the Malaysia property for sale market is promising, lifted by a buoyant stock market, said Capital Dynamics Sdn Bhd managing director Tan Teng Boo.

He said portfolio funds investing into property stocks on Bursa Malaysia was in line with similar investments in other sectors that had experienced some gains.

Wong Sui Ee
“So far, we have not seen a significant amount of funds channelled into property stocks. However, the level of foreign direct investment coming into the country has improved,” he said.

A Singapore-based foreign fund manager said Malaysian properties were beginning to attract more foreign investors because of the Foreign Investment Committee's relaxation of the rulings on the purchases of Malaysian properties as well as the market talk of a possible reduction in real property gains tax by the end of the year.

“That aside, we feel the biggest plus factor is that Malaysian prime properties are fairly undervalued compared with prime properties in other developing countries in the region,” he said.

The foreign fund manager also said the real estate investment trust (REIT) market in Malaysia was getting more “credible” as foreign investors were now able to access critical information in the valuation of special classes of property stocks via analyst reports.

He said in some mature economies like the United States and Australia where the REIT industry had flourished, properties under trusts played a significant role in stabilising property markets.

AmanahRaya REIT is one of the REITs listed on Bursa Malaysia
A broker with TA Securities said the brokerage was seeing good trading volumes in property stocks, including those under REITs.

He said except for AmanahRaya REIT, the REITs listed on Bursa Malaysia had outperformed the market. “There is certainly greater interest in property stocks now than before,” said the broker