When Malaysian Prime Minister Mahathir Mohamad spoke out against foreign real estate ownership, there was some concern it could impact the country’s property market. In particular, comments about how property assets held by foreigners does not guarantee them automatic residency caused some concern.
In the Prime Minister’s crosshairs was the Forest City project in Johor Bahru, a development that has been marketed extensively to China. According to a report from Reuters, roughly 70 percent of units in the development were sold to Chinese buyers with the government concerned those taking up units were using them as a foothold to live in Malaysia.
The government has since clarified Mahathir’s comments with a statement from the Prime Minister’s Office reading, “On property purchases by foreigners, irrespective of nationality, Malaysia imposes certain conditions, and information on these conditions are publicly available. Purchase of properties, however, does not guarantee automatic residency in the country.”
However, it appears as if these comments have done little to shake the confidence of foreign real estate investors. In fact, data from leading Chinese international real estate website Juwai.com shows more mainland buyers are jumping back into the market.
“Prime Minister Mahathir’s comments discouraged all overseas buyers, not just Chinese, by injecting a shot of uncertainty into the market. What our data suggests is that the decline in buyers has not been so great as sometimes believed and that a recovery is very much underway,” Carrie Law, CEO and Director of Juwai.com, explained.
She continued, “Our data shows Chinese buyers made 10-times more inquiries on Malaysian property in September than in the same month last year. That is the largest growth rate we have seen yet this year.”
One reason for the positivity is the fact that nothing new is being said about foreign property ownership in Malaysia. Instead, the government is highlighting existing policies that have been in place for a long time. For Chinese investors, there are several other reasons why the country is a top pick for property.
“During the last 90 days, there has been less than 0.5 percent currency volatility between the Yuan and the ringgit. That indicates a stable currency relationship between the two countries. And because of price declines, this makes Malaysia a serious choice for Chinese buyers,” Law stated. “Cultural reasons also favour Malaysia over competing markets, like Thailand, for example.”