KUALA LUMPUR: Some property developers had recently observed that the weaker ringgit could lure foreign investors to Malaysian properties but MKH Bhd managing director Tan Sri Eddy Chen does not seem to think so as he opines that Malaysia is just not on their radar.
“Foreigners are very savvy investors and to them Malaysia is not a target,” Chen told the floor at the 17th Malaysia Strategic Outlook Conference today.
Chen, who was one of the speakers invited to share his views on the country’s property outlook this year, said this was evidenced from how local property prices had remained cheap relative to more developed markets like Hong Kong in the past 20 years.
The government’s cooling measures on the property sector – including the one by Selangor that limit foreign property ownership to properties costing more than RM2 million in certain areas of the state - had not helped matters, he said, adding that foreigners investing here will have substantial difficulty offloading their properties later.
“How many property developers do you know who are building properties over RM2 million? There are not many but there may be pockets of property that can be foreign-driven.” he said.
He added that historically, foreign property investments in Malaysia stood at about 2-3% but in certain areas like Iskandar Malaysia, Johor, the figure could reach 30-35%.
REI Group of Companies CEO and co-founder Dr Daniel Gambero agreed with Chen’s view that foreign investors’ participation in the local property market is low.
“How can we attract foreigners when set the cap at RM2 million? We should find different ways of attracting foreigners in terms of values,” he said.
Gambero suggested that other investment grade products for the property market should be designed in order to stimulate the market.
He also observed that it would be impossible for the supply of affordable homes in the market to meet demand.
“In Budget 2014, the government announced the launch of more than 150,000 low-cost houses [but] the actual launch of low-cost houses in the past 12 months was only 10,000,” he said.
The conference was organised by the Asian Strategy and Leadership and Leadership Institute or ASLI.