Experts have different views on the impact of Prime Minister Tun Dr Mahathir Mohamad’s comments that overseas nationals will be prohibited from purchasing homes in the US$100 billion (RM391 billion) Forest City project off Johor, reported the Business Times.
For instance, Maybank Kim Eng economist Chua Hak Bin thinks that such sudden comments without any official policy statements can lead to bearish market sentiment.
“Such ad hoc remarks from PM Mahathir, without an official policy statement, can create confusion and dent investor confidence.”
He is also curious if other developments, including those being undertaken by foreign companies aside from those based in China, would get the same treatment. “Discriminating against any single property project appears rather arbitrary.”
“It is also not clear whether the anti-China buyer measure is for the whole country or just Johor,” he noted, adding that a stamp duty for overseas real estate buyers would be more appropriate.
However, ING Asia economist Prakash Sakpal believes that Mahathir’s comments could turn off foreigners considering to purchase properties in the country.
“PM Mahathir’s comments will be detrimental not only to foreign investor sentiment towards Malaysia’s property sector but also to the economy in general.”
On the other hand, other experts contend that there’s still no certainty regarding the PM’s comments, with Housing Minister Zuraida Kamaruddin saying that his announcement is yet to be formalised in policy.
“Most people will probably take a wait-and-see approach,” said DBS economist Irvin Seah. In particular, those watching the market should pay close attention to Putrajaya’s budget announcement in October “to get more clarity on the policy direction going forward.”
Although Mahathir’s latest comment cause some market jitters, it is unlikely that investors will be pulling out of the country. “Investors who are already in the market would make their decisions based on the country’s longer-term economic outlook.”
Despite the PM’s remark’s on Forest City, investors are more likely to feel at ease, given that a cleaner and more transparent government is now in control in Malaysia, said Independent economist Prasenjit K Basu.
“Investors should feel more confident about investing in a less corrupt, multi-racial and competent Malaysia.”
Image sourced from Businesstimes.com.sg
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
Thinking of moving to Johor? Find the best property that suits you here. But first, are you eligible for a housing loan? Find out if you are eligible for a loan with the Mortgage Pre-Qualifier tool.
