[andyk2]

Robert,

There are some good points in your post, especially insomuch as the beaches on the East coast of Malaysia suffer from being on the second busiest shipping lane in the world. But the Banyan Curve project was never meant as a holiday home.

It is used as a convention and conference centre throughout the week and as a place for a weekend break for residents of Kuala Lumpur at weekends. The first phase opened in 2006 and those clients who invested at that early stage witnessed a gross return last year of 9.36%

With this kind of return, the future market will be driven by foreign investors - but not the European market necessarily. Chinese, Korean and investors from the Middle East are pouring money into Malaysia as they see the country as one of the most favourable to meet their investment goals.

Generally prices are rising by 6% in Malaysia (source Bank Negara), although off-plan serviced apartments in KLCC are seeing an increase in prices of 40-45% during construction - these price increases are mostly fuelled by the domestic market as it is rare to see any new releases advertised outside of Malaysia.

8% rental yield does cover the mortgage, tax liability and service charges, but only if you take a mortgage at 5.25% or less (easily available) and over a thirty year period. Beware, some banks have high charges for early redemption of the loan.

Finally, the Base Lending Rate (BLR) in Malaysia has not changed since April 2006. The only way you could have lost money on an investment in Malaysia is if you bought in a foreign currency which has strengthened against the Ringgitt (ie the €uro). As sterling has lost 8% of its value (against RM) and the dollar 5% over the past 12 months, it would appear that real capital appreciation in Malaysia has been well over 10% this year and therefore a darned good investment.

But as you rightly state in your post ........... not a holiday home