The federal government’s anti-China sentiment could negatively impact the real estate market of Kuala Lumpur, reported the Financial Times.
In August 2018, Malaysia’s newly elected Prime Minister Tun Dr. Mahathir Mohamad stated that buying a property in Forest City doesn’t automatically mean that foreign nationals will get visas that lets them legally live in the country for a long-term.
By foreigners, the federal government was specifically implying Chinese nationals, as they accounted for two out of three home buyers in Forest City, a mega project off Johor consisting of four artificial islands that are expected to house about 700,000 people in the future.
Across the country, property acquisitions by the Chinese surged by three-hold to US$2.3 billion last year, based on data from Juwai.com, a China-based property portal that primarily markets offshore real estate. Malaysian properties also saw the fourth biggest number of buyer inquiries in Asia via the website.
During the election campaign, Tun Mahathir criticised property developments of Chinese companies due to allegations that such projects mostly employ Chinese instead of Malaysians. Tun Mahathir’s election promise to look into Chinese projects resonated with voters, most of whom felt that many Malaysians are being left out of these developments.
There were also allegations that a portion of the massive loans provided by Beijing to fund large-scale projects was used by the previous administration to repay some of the debts of the scandal-ridden 1MDB.
Nonetheless, property agents argue that there is little proof that the huge amount of home purchases by Chinese nationals is pushing up property prices across the country and in capital. Moreover, they pointed out that foreigners are only allowed to buy homes costing at least RM1 million in Kuala Lumpur.
It also appears that Tun Mahathir’s anti-China sentiment has not affected the country’s successful international residency scheme, namely the Malaysia My Second Home programme (MM2H).
Since 2002, the scheme has granted over 40,000 visas to foreigners from more than 100 nations, with Chinese nationals making up more than 25 percent of the successful applicants in MM2H.
Amy Wong of property consultancy Savills noted that MM2H has attracted many foreign retirees. “They like the weather, comfortably warm all year. Some find retirement boring so start working again; as consultants, teachers in the international schools, or lecturers.”
Despite Tun Mahathir’s anti-China sentiment, the federal government has not yet imposed policies to regulate home purchase by foreigners in any parts of the country, including Kuala Lumpur and Johor, where Forest City is located. Local officials in Johor also clarified that property developments are within the purview of Malaysia’s state government, not the federal government.
Image source: Asia Times
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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