The appeal of investing in overseas properties is always strong, especially for Singaporeans who benefit from favorable currency exchange rates.
However, caution must be exercised when considering this type of investment. Just like with residential properties in Singapore, it’s crucial to have a deep understanding of the local rules and regulations before blindly entering the market.
One of my main concerns when investing in Malaysia is its political stability. The current administration is pro-growth and aims to re-introduce initiatives to promote stronger economic cooperation between Malaysia and Singapore.
However, elections are held every 4-6 years, and a new government or leader could put plans on pause.
The High Speed Rail (HSR) project between Kuala Lumpur (KL) and Singapore was first announced in 2010, and at that time, the prospect of a train journey between the two cities instead of flying was very exciting.
Property investments along the HSR stations, including Jurong East, started attracting more attention from investors. However, it’s now 2023 and the project is still in the air, with a delay of over 13 years. A kid would have completed his primary and secondary school studies.
Some of my clients have invested in properties in Iskandar, with results depending on their timing of entry and exit. Some have made quick profits and sold, while others are holding on to their investments, adopting a “buy and pray” strategy in the hope that prices will shift back in their favor.
It’s also important to keep in mind the currency exchange risk involved with overseas property investments. Eg, even if the property prices have increased, after taking into account the impact of currency exchange rates, you could still end up losing money.
Investing in overseas properties requires a significant amount of research and due diligence, even in a small market like Singapore, let alone a larger country like Malaysia. That’s why I always advise clients to do your own due dilligence DYODD.
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