This historic city of Melaka on the west coast of Malaysia is certainly poised for some dramatic changes in the next decade. The RM 43 billion Melaka Gateway project is under way with Chinese and local investors. The Chinsese seem to have an affinity to Melaka, perhaps because of the legacy of Admiral Zheng He, the Muslim Chinese explorer who help develop trade between the port and his home country. Melaka is also in alliance with the Chinese for the nearby RM 12.5 billion Kuala Linggi port project which will be designed to handle large tankers. Overall China is committed to investments and importing goods from Malaysia.
Melaka will also be a station on the high-speed train route between Kuala Lumpur and Singapore. This will be sited in Ayer Keroh and trains can be expected to run by 2026. Travelling time to reach KL or Singapore will be cut dramatically. In the future, people may work in either capital city and commute by train.
All this activity and future development is bound to have an effect on property prices. However, before you rush to put down your hard-earned cash, take a minute.
Malaysia, and even Melaka town itself, has plenty of land available for development. Property prices will rise but slowly. A bungalow or apartment in Melaka is a good investment if you want to retire or have a holiday home. You will not, however, make a fast buck although property near the high speed train line should jump in value soon.
Nevertheless, the property prices are lower than in Kuala Lumpur and way, way below Singapore rates.
Here are a few examples. A modern four-bed detached house with land can be found between RM 800,000 and RM 1.2 million. A recently-built semi-detached will go on the market at around RM 550,000. A 1,000 square foot apartment in a nice condominium near the sea can still be bought for only RM 200,000. Foreigners, by the way, have to buy property valued at more than RM 1 million. This is to protect local buyers which is fair enough. However, if you are planning to reside under the MM2H scheme, you need only spend RM500,000.
A home here is so much better value than in Singapore. For the cost of an HDB you can buy a nice modern semi-detached house in Melaka. However, if you are thinking to invest and rent out then choose another city. There is no major university in this location that is attracting hundreds of foreign students and lecturers. Nor is there major influx of ex-pats joining corporate offices anxious to rent your nice house at a high rent. The rental income on property in Melaka is low.
RM.2.5 million. 11.000 square feet.
Despite this apparent lack of investment value, a buyer can find attractive homes of all sorts in Melaka at a price most can afford. Long term, you will get your money back especially as currently the Ringgit is low. And you could enjoy all the laid-back attractions this UNESCO heritage city has to offer. Malaysia is ranked as one of the top six countries in which to retire.
Many visitors come regularly to a home-stay holiday, fall in love with Melaka and buy a home here.