China has overtaken Singapore to emerge as the biggest investor in Malaysia's real estate market, according to data prepared by a leading research company. This suggests that Chinese investors are getting wary about the soaring real estate prices in the domestic market and are hunting for cheap bargains abroad.       

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A data put forth by Real Capital Analytics claims that Chinese companies invested more than $2.1bn in Malaysia's real estate between 2014 and 2016, compared with $985m invested by Singaporean firms during the same period.   

Malaysia's cheap property prices, which are way cheaper than its Chinese counterparts, certainly seem to have caught the attention of Chinese investors. A mere cursory glance at Chinese property prices is enough to explain Chinese investor's newfound love for the Malaysian market, with property prices in Beijing, Shanghai, and Shenzhen counted among the most expensive in the world.       

"If you compare prices, even between Malaysia and China, you are looking at a significant difference," said Sigrid Zialcita, managing director of Asia-Pacific research at Cushman & Wakefield. "Malaysia is much more affordable."   

The warming of trade ties between China and Malaysia, despite the tension over the South China Sea, is also the reason why Mainland investors have started searching for investment opportunities in the country.      

Besides, a strong Chinese diaspora living in Kuala Lumpur and other cities have forged a deep link that has apparently further helped in strengthening trade ties. 

Some analysts claim that the recent curb imposed on capital flight by Chinese regulators could prematurely end or at least dampen the spirit of mainland investors. It has already forced Country Garden - a Chinese real estate giant - to shut down showrooms in mainland China for its flagship Malaysian real estate project. 

Globally speaking, China's investment in real estate soared to a new high last year, with the total Chinese investment in the international real estate market climbing to $33bn in 2016, according to real estate group JLL.   

TagsChina and Malaysia, Malaysia Real Estate Market, Singapore and China, Singapore