PETALING JAYA (Oct 30): The Selangor branch of Real Estate and Housing Developers’ Association (Rehda) is in favour of the state reducing the threshold price for foreigners buying high-rise properties, and is currently in discussions with the state government, according to its chairman Zulkifly Garib.
In Budget 2020, Finance Minister Lim Guan Eng announced the threshold price for high-rise properties in urban areas for foreigners would be reduced from RM1 million to RM600,000 in 2020.
However, land matters come under the purview of the states which have the power to set their own guidelines. In Selangor, the threshold price for foreigners is RM2 million in Zones 1 and 2— including areas such as Petaling and Kuala Selangor — and RM1 million in Zone 3 which includes Hulu Selangor and Sabak Bernam.
Also, foreigners are not allowed to buy residential landed properties, unless the property is issued with a landed strata title as in gated communities.
Penang is the only state that has revised the threshold for foreign buyers to RM800,000 from RM1 million (on the mainland), Zulkifly said, adding it is still “status quo for the other states”.
Describing the budget announcement as “a good move”, as it makes completed unsold units more attractive to foreign buyers, Zulkifly said the measure is expected to help “a little”.
“That’s why we urge the state government to lower down [the threshold] a bit. This is only a one-time thing for 2020. Let’s give it a shot,” Zulkifly, who is also the chief operating officer of Glomac Bhd, said to reporters during the briefing on Rehda Selangor's Home Ownership Campaign — Malaysia Property Expo 2019 (HOC—MAPEX 2019).
Another “plus point” of the move is that it is controlled and regulated, he added.
He also does not think the measure will result in an influx of foreign buyers into the country — foreign ownership in Malaysian property is only in the single digit — but instead serve to spur the property market.
Rehda Selangor deputy chairman Datuk Ho Hon Sang agreed the move will help developers to clear some of their unsold stock, and reinvest into new property developments.
“Property development itself, though it only contributes about 3% to the country’s GDP (gross domestic product), but the accompanying services and industries linked to property development, altogether contribute about 14% of GDP,” said Ho, who is also Mah Sing Group Bhd's chief executive officer.
“It’s huge … there’s the insurance, banking services, consulting services, legal services and many more.”
On the property market outlook for next year, Zulkifly believes the market is “not bleak”, and that there is still demand. “The market is there, the only thing that is affecting the market now are the external factors and financing.”
As at mid-October, he said slightly more than 11,000 units valued at over RM7 billion had been sold under the HOC incentive in Selangor, more than twice the RM3 billion target nationwide.
Rehda Selangor is expecting “quite a bit more sales” over the remaining two months of the year.
Zukifly also announced that Redha’s final two mini HOC—MAPEX in Melawati Mall and Central I-City Mallwould be held from Nov 1 to Nov 3, and Nov 14 to Nov 17 respectively.