Last updated Saturday, July 26, 2014 12:01am

A worker is seen at a construction site, with the Malaysia's landmark Petronas Twin Towers in the background, in Kuala Lumpur September 12, 2013. – Reuters picA worker is seen at a construction site, with the Malaysia's landmark Petronas Twin Towers in the background, in Kuala Lumpur September 12, 2013. – Reuters picKUALA LUMPUR, Nov 11 — Malaysia has emerged as the new preferred destination for the Chinese investor looking for a bargain deal in real estate, the Wall Street Journal (WSJ) has reported.

According to the report, Chinese property investors who have grown comfortable buying abroad are now seeking greener pastures by trying their luck in “second-tier” markets such as Edinburgh, Miami and Malaysia.

“Middle-class Chinese are now going to second-tier cities... These places offer higher growth opportunities because more people are doing that now,” Thomas Lam, head of research for Greater China at Knight Frank, was quoted by the international business news daily as saying.

The property consultancy firm explained that house prices in Malaysia are only 5 per cent compared to the average price in Hong Kong, making it a big draw for Chinese buyers.

In addition, foreign homeowners in Malaysia enjoy easy visa entries from the Malaysia My Second Home programme which promises a long-stay visa of up to 10 years for eligible foreigners.

Guangdong-based property developer Country Garden Holdings Ltd was singled out by WSJ, for its ambitious luxury units project in Danga Bay, Johor.

A report by local financial daily The Edge in September noted that at least 66 per cent of its units have been snapped up just within a month, driven partly by Chinese investors which account for 25 per cent of the sales.

The Edge also quoted local property developers who were shocked with the boldness of Country Garden in developing its project all at one go instead of launching it phase by phase as is commonly done in this country.

It was only in December last year that Country Garden purchased 57 acres of land from Iskandar Waterfront Sdn Bhd for RM800 million — the first and biggest investment to date by the company, and a developer from China in the area.

Its Country Garden @ Danga Bay project, with an estimated gross development value of RM18 billion, was subsequently launched in August this year.

Danga Bay is situated in Johor Baru, near the booming new township of Iskandar Malaysia, which is set to become a property hotspot after Hong Kong and Singapore imposed 15 per cent levies to slow down foreign investments that had overheated their property markets.

The Chinese investors’ foray into Malaysia’s real estate scene comes amid cooling measures announced by Putrajaya following rocketing house prices caused by speculation.

In Budget 2014 tabled last month, Putrajaya doubled the real property gains tax (RPGT) to 30 per cent for properties disposed within three years of acquisition, 20 per cent within the fourth year, and 15 per cent on the fifth year.

Putrajaya also did away with the Developers Interest Bearing Scheme in which the developer pays the interest payments for the buyers’ loans during the construction of a property, which was seen as an incentive for speculation.

The minimum price of property that may be purchased by foreigners was also doubled from RM500,000 to RM1 million.

Late last month, Knight Frank Malaysia noted that increasing the floor price for foreigners may beat off speculators, leaving only genuine foreign investors buying properties in Malaysia.

“Yes, certainly it will have an effect (on foreign investors). We’ve had a number of years where the RPGT was low. (Prime Minister Datuk Seri Najib Razak) has been slowly increasing the RPGT, but this year the increase is substantial.

“Raising it from RM500,000 to RM1 million, however, is not a big issue... What they buy is easily above RM1 million,” said Malaysian branch managing director Sarkunan Subramaniam.