Govt’s Forest City visa directive to have short-term impact

KUALA LUMPUR: The property market will not be affected by the government’s recent directive barring foreigners who bought residential units in Forest City from obtaining visas to stay there, said analysts.

Hartabumi.com chief executive officer Radzi Tajuddin said the government’s actions only had a short-term impact on the real estate market, as Malaysia’s home prices were still among the cheapest in Southeast Asia.

He said when compared with the per square foot prices in Jakarta and Bangkok, houses in Malaysia were cheaper and foreign demand for local residential properties was likely to continue.

“In the long run, I believe this will reinvigorate the country’s real estate market, with developers building houses that reflect the buyers’ ability to pay for them.”

Radzi also said the government’s directive was in line with other countries such as the United Kingdom and Indonesia, which introduced more stringent regulations on property purchases by foreigners.

In fact, he said, the New Zealand government recently prohibited foreigners from buying residential units in the country altogether.

CBRE WTW managing director Foo Gee Jen said Prime Minister Tun Dr Mahathir Mohamad’s concerns about the project in Johor was that there was no quota on foreign ownership.

“Perhaps, what Dr Mahathir is trying to convey is the importance for every project to have a quota (for foreign buyers). Let’s say, for example, 20 per cent and it’s not just limited to Chinese but to all foreigners.

“Therefore, I believe what the government is trying to do is to ensure that all parties are subject to the same rules,” he said.

Foo believed foreign buyers’ sentiments on the local property market would not be affected as they were aware of the real market conditions in the country.

He said there were two categories of foreign buyers — either for investment purposes and to participate in the Malaysia My Second Home programme.

“I think there would be little or no impact on the second category of buyers,” he said.

Commenting on the proposal by the Johor government to set a 30 per cent quota for local buyers at Forest City, Foo opined that such rules were unfair to other project developers, especially local companies.

“I believe the property industry in Malaysia should not have too many rules. It should have a standardised set of rules that apply to all developers equally.

“Do not impose double standards on local developers. Foreign buyer quota is low for local developers but it is high for developers from China, so it will benefit them (Chinese developers) more.

“Every party should start on an equal footing, irrespective of whether they are the foreign or local developers. No special privileges should be given to anyone,” he said.

I believe the property industry in Malaysia should not have too many rule. FOO GEE JEN CBRE WTW managing director