Malaysia lures the second-home set

By Hsu Chuang Khoo

KUALA LUMPUR (Reuters) - If a second home in the sun is your thing but a villa in Florida or Tuscany is out of reach, then Malaysia's property developers have something to show you.

Sun-blackened site workers cooling off under the trees at the Kiara Hills development will vouch for the warm climate. For a cool 4 million ringgit (587,741 pounds), three storeys of detached splendour could be yours at this swanky new Kuala Lumpur suburb on the edge of the jungle.

Up the coast in northern Penang state, about 100 kilometres from the resort island of Langkawi, 500,000 ringgit will buy you a tropical seaside apartment with a pool, 24-hour security and a gymnasium.

Interest rates are low and the government has slashed red tape to welcome wealthy foreigners. Developers are making hay while the sun shines.

"Property is not an easy business, but if you get the market positioning right, it can be very lucrative," said Khor Teng Tong, Executive Chairman of builder Hunza Properties.

"Right now, the market is in high-end properties."

Bigger players than Hunza like SP Setia, Mah Sing, Bandar Raya Developments and Sunway City have been selling more homes to foreigners.

Malaysia's benchmark interest rate of 6.75 percent are lower than other southeast Asian countries, including Indonesia, Thailand, Vietnam and the Philippines.