Freeing policies key to attracting more FDIs to boost property market, say industry players

PETALING JAYA: The government must continue liberalising Malaysia’s economic policies to encourage more foreign direct investment (FDI) which will in turn further boost the property market, said two property industry veterans.

The country’s property industry will only stand to benefit from “continuous liberalisation” to enable industry players to compete globally, said the two panel members of a CEO Forum entitled “The property market after the global economic crisis – will the government’s recent liberalisation measures speed up recovery” at the National Property and Housing Summit 2009 organised by the Asian Strategy and Leadership Institute on Oct 19. 

“The state and federal governments must work hand-in-hand to further liberalise the industry. All these policies are more important in the long run than stimulus packages,” said Country Heights Holdings Group deputy chairman Tan Sri Lee Kim Yew.

He said policies such as the bumiputera quota in equity ownership should be reviewed so that the economy will grow as some companies are looking at investing in Malaysia but are deterred by the quota requirement.

Another panel member, Sunway City Bhd’s executive director Datuk Jeffrey Ng, said Malaysia was lagging behind its regional counterparts in attracting FDIs and consequently fail to benefit from their spillover effects.

“Spillover effects of FDI inflows will increase expatriate population, generate more demand for housing, office, and retail space in terms of sales and rentals, and higher-value employment opportunities,” he said.

He added that the annual FDI inflow rate to Malaysia between 2000 and 2008 was only 4%. In comparison, Singapore, Thailand, Vietnam and Indonesia saw increases of 15% to 25%.

He proposed several measures to attract more FDIs including introducing a more competitive tax regime, finalising free trade agreements with major trading nations, permanent residence visas for wealthy and professionally-skilled migrants, attracting more foreign small/medium enterprises and opening up property management services.

Ng added that rationalising FIC guidelines with regards to property transactions and enhancing the Malaysia My Second Home (MM2H) programme are positive steps in encouraging foreigners to purchase property in Malaysia.

However, the reforms and requirements for the MM2H must be simple and easy to understand, he said.