Now that we are able to travel freely again, many are considering properties in out-of-state destinations. Holiday homes are now worth a look at again thanks to softening property prices. But for many, putting down money for a holiday home in this relatively uncertain climate can be considered a tricky and a somewhat indulgent investment.
After all, you won’t be staying there most of the time. So unless you have the cash/disposable income to spare, it may not be an advisable investment. However, if you’re keen on getting a holiday home out of state there are opportunities you can leverage off.
More Enticing Prices
The pandemic has affected many areas of trade and business, including the real estate market, which has caused prices to come down. According to the Malaysia Property Market Index (MPMI), last year the overall median asking price psf dropped by 1.79% year-on-year (YoY). As such, this creates a more favourable market for buyers who are looking to extend their investments in the property sector.
Prominent destinations such as Penang and Johor continue to appeal, owing to their many positive attributes, making them a hit for both tourists and visitors. Likewise, Ipoh and Melaka, which are relatively short drives away from the capital city. Both cities also boast more favourable prices per psf, which creates an avenue for a broader market.
Although it’s down to personal preferences, most buyers of holiday homes will want one that has resort-styled facilities in a good location that comes with a great view. Apartments and condominiums are the most preferred options as they come with recreational facilities and amenities such as a swimming pool and a gym. They also feature round the clock security, which allays any fears especially for out-of-towners.
The Right Location
As with any property investment, location is the key consideration. If you’re looking for a holiday home, consider a city where there’s ample stream of visitors and holidaymakers. It also pays if the destination has easy access in terms of airports and highways. Oftentimes, buyers also opt for a property in their home state, due to familiarity as well as forward planning for eventual retirement.
Penang has often been one of the top considerations for most. A top draw for tourists, and famous for its food and beaches, the state is an alluring choice for a holiday home. The northern state enjoys relatively stable prices for real estate as such finding a bargain buy can take a fair bit of searching. Penang consistently draws in a lot of interest from property buyers. On Mudah.my, Penang island has an average of over 150,000 daily searches according to data from Q4 last year.
Iskandar Puteri and Johor Bahru also draws significant interest. Being close to Singapore plus being surrounded by hospitality and retail developments such as Legoland and JPO, it serves as a viable consideration, even more so as the area has ample overhang developments, which will translate to more worthwhile bargains. Based on search data, both Iskandar Puteri and Johor Bahru are searched prominently by users with an average of 6.5k and 23.3k average of daily searches, respectively.
Many also consider holiday destinations such as Langkawi. The idyllic island, a hotbed for tourists, will always have sustainable demand, especially as it is easily accessible by ferry and by commercial airlines. Langkawi also has several new developments being built, which provides more choices for investors looking to splash down for a holiday home.
Although there are many options and considerations, one of the main factors to consider is the property’s appreciative value and rental opportunities. Long term rentals as well as short term leases on platforms such as Airbnb and Agoda Homes allow property owners to gain good returns on their investment. By transforming the property into a worthwhile revenue stream, it can turn each home into a profitable asset.
With the real estate market set for a turnaround in the next few years, do not discount the appreciative value your holiday home may deliver. Purchasing a property now, especially at more favourable prices may result in each home rising in value over the course of the next few years, especially with a rebounding economy.
Lastly, consider each home as an investable asset for the future. Securing a luxurious condominium or property in a secured, well-appointed, community-driven township, could also prove enticing as a future retirement home. Above all else though, ensure that you are opting to buy a holiday home for a good and valid reason and then practice due diligence and research before making that decision to purchase it.