Lower threshold price for foreigners buying apartments in Malaysia

A photo taken on May 8, 2018, shows the Kuala Lumpur city skyline. Malaysia will be lowering the minimum price for foreigners to buy high-rise properties in urban areas next year.
A photo taken on May 8, 2018, shows the Kuala Lumpur city skyline. Malaysia will be lowering the minimum price for foreigners to buy high-rise properties in urban areas next year.ST PHOTO: KUA CHEE SIONG

KUALA LUMPUR • Foreigners can soon buy Malaysian apartments and condominiums at lower prices in big cities, and the government will inject RM85 million (S$28 million) to improve traffic flow at the two Johor checkpoints into Singapore.

Finance Minister Lim Guan Eng said yesterday that the minimum purchase price of high-rise units for foreign buyers has been lowered to RM600,000 from RM1 million currently.

The move is to help reduce supply overhang of these high-rise units totalling some RM8.3 billion, he said in presenting the 2020 budget in Parliament.

The announcement followed warnings by the central bank and property players about the glut in housing units in big cities including Johor Baru.

Last month, Johor's Housing, Communication and Multimedia Committee chairman Dzulkefly Ahmad said the state government is looking at lowering the RM1 million threshold for foreigners to buy property, as it tries to clear 51,000 unsold units in the southern Malaysian state. He said that homes priced at RM600,000 and above make up between 60 per cent and 70 per cent of unsold properties in Johor.

Prime Minister Mahathir Mohamad, speaking to reporters later in Parliament, said the lower minimum prices for foreign buyers are meant for high-rise units, not landed homes. "As you know, there is a property overhang. This is limited to flats (apartments and condominiums). That's just flats and if there's a property overhang, we need to sell off these properties," Tun Dr Mahathir said.

Mr Lim, at the news conference, set aside worries that the move will lead to developers building more condominiums and then pricing them to sell only to foreigners. "I don't think foreign buyers are that stupid to buy houses that don't reflect the market value. If we are afraid of foreign buyers buying (the units), we have a supply overhang. Locals can buy if they want to, but they are not buying and now we got a surplus."

The Finance Minister had also said in Parliament that the government is looking to improve traffic flow at the two Customs, immigration and quarantine checkpoints linking Johor Baru and Singapore. The works will include adding 50 more motorcycle immigration counters at the Causeway and at the Johor side of the Tuas checkpoints.

 
 

Mr Lim said that Malaysia plans to continue with the JB-to-Singapore Rapid Transit System.

Malaysia and Singapore signed an agreement last year to build the 4km cross-border MRT link from Woodlands in Singapore to Bukit Chagar in Johor to help alleviate congestion on the Causeway. Malaysia, under the Pakatan Harapan coalition, had asked for extensions to respond to Singapore on issues relating to the RM4 billion project. The latest extension will expire around the end of this month.

A version of this article appeared in the print edition of The Straits Times on October 12, 2019, with the headline 'Lower threshold price for foreigners buying apartments'. Print Edition | Subscribe