By Viktor Chong viktorchong@thestar.com.my

Friendly policies, diverse culture and accommodative environment contribute to Malaysia’s attraction comparative to other ASEAN countries.

The unveiling of Budget 2020 has brought about mixed reactions from the people. It is common for some to lean on the dark side of pessimism while others foresee a positive light on the horizon. Speculation is rife as many scramble to determine its macroscopic impact, and tacitly, the ripple effects that are bound to affect the country.

Regardless, the Budget 2020 has some interesting policies in store for the property market, and StarProperty is here to home in on one—to reduce supply overhang of condominiums, apartments of RM8.3bil, the government will lower the threshold on high rise property prices in urban areas for foreign ownership from RM1mil to RM600,000 in 2020.

According to International Real Estate Federation president Michael Geh Thuan Peng, the move, in addition to the current Home Ownership Campaign will assist developers in clearing up unsold stocks.

“The lowering of the threshold is only for the existing unsold units, which does not include new projects yet to be launched and the secondary market,” Geh explained.

“We understand that each state has its own local economy so the threshold may be adopted differently by each state,” said Geh.”

He further noted that foreign purchasers often buy properties in main cities such as Penang, Johor, Sabah and Kuala Lumpur. “We welcome them to come here to buy up these unsold properties especially if they are MM2H applicants,” he said.

Geh stated that foreign purchase of properties in Malaysia remained at less than 0.5% as evidenced by recent figures announced by the National Property Information Centre.

“The number of houses bought by foreigners between January and June this year is only 0.4% or 398 units as compared to 99,524 units or 99.6% of Malaysian buyers,” he added.

With the budget around the corner, Polygon Properties associate partner George Loo predicted that the government would focus more on the foreigners to grow the property market. He believed that the reduction in threshold limit would act as a catalyst to increase property prices in Malaysia.

Loo advised caution because the policy is reserved for certain areas only.

“Now that the majority of developers are building houses below the RM500,000 margin, those planning to purchase homes for own stay may assume that the future price will climb again,” he said, adding that this speculation on capital appreciation may prompt Malaysian to make a move to buy now. 

However, Loo said the implementation of the policy might not have a huge impact on the market as foreigners do not have much choice of properties to buy at the RM600,000 range.

“Foreigners want conveniences such as the proximity to international schools, hospitals, shopping malls and public transit systems,” he said. According to Loo, properties that exhibit such qualities usually reside in places such as Mont Kiara, KLCC and Bangsar which are already priced at the RM1mil mark.

“It is interesting to see what the government is going to do in terms of which location they are talking about. What do they mean by overhang properties? These types of rules are state-related, and what we have with the budget is on a federal level only,” said Syarikat Ong managing partner Agnes Ong at the Malaysia Budget Forum: Moving into 2020 with Budget 2020. The event was co-sponsored by StarProperty and KPMG.

Ong said the influx of foreigners into the country is still very much dependent on the strength of the Ringgit.

According to her, the threshold helps, but it is not the main reason why foreigners invest in another country. On the backdrop that the government is moving the economy forward, then Malaysia will be a good place to invest due to the fact that it is a cheaper living location compared to other parts of Asia.

“We have a very sophisticated school system. In fact, Malaysia is one of the Asian destinations for education,” said Ong, further pointing out the multicultural environment as a selling factor besides the variety of food.