Today is a good day. I just turned one year wiser, and I received my first readers question in my Snail Inbox. Stephen is a foreigner living in Singapore, and is looking to invest in the Malaysia property market. He ask the following question:
I hope you don’t mind my writing to you directly like this with a relatively straightforward question. As a foreigner living in Singapore, how can I finance the purchase of a property in Penang? Do I contact a local bank in Malaysia/Penang? In other words, do Malaysian banks lend to non-residents? I am not applying for the MM2H. Do you have any particular recommendations? Thanks very much.
The good news is that Malaysian Banks do not discriminate against foreign buyers of Malaysian properties. In fact, the approval process is identical to that
of a Malaysian borrower. You can usually expect to get 70% financing. Some can go as high as 85%. More and the customer/bank relationship is kind of special… even though Peter England from CIMB says they can go as high as 95%.
But you can also get your historic bank to help you. Some are ready to consider financing a property in Malaysia; especially Singaporean Banks. You should check wi
th them first. Should they not consider it, you should try to get them to recommend you to their local branch in Malaysia. A letter of introduction can go a long way toward negotiating better rates.
If you prefer to go with local bank, I usually recommend CIMB. Thanks to their re-branding, they still are considered new to the market – hence more aggressive – and are quite professional, by Malaysians standards…
Few things to keep in mind when buying a property in Malaysia:
- Foreigners are restricted to buying properties with a minimum price threshold. The threshold usually is of RM250K, but can vary from state to state. So check it out first.
- The buying process is slightly longer for a foreigner as it includes a compulsory state authority consent before the property can be transferred to the foreigner. It can take up to 6 months, even though the Malaysian government is trying to reduce this length.
- No need to come down to Malaysia to sign your Sales & Purchase Agreement. You can do it at the Malaysian High Commission of your country of residence.
- I still highly advise for you to check the property or its location before putting down your deposit. If you can’t, take the time to Google Map the location. You never know what surprises the developer / owner can try to hide… 3 days ago I came across a water-tank located right inside a new development premises; Not a good surprise!
Unfortunately, I am not very familiar with Penang. Therefore, I can not help you much further here. But should you be looking for properties in Kuala Lumpur, I highly recommend JED Realty as Real Estate agents. They are very friendly and professional.
Good luck in your searches & investment !
Few interesting links
Think Property – Promising New RE website
Bank Negara Malaysia – BNM info for foreign investors
My Property Talk – Best Malaysian RE forum, not much on Penang unfortunately