Property price rise not due to foreigners, says MPI

KUALA LUMPUR (Sept 4): It is only a perception that foreigners influence the rising property prices in Malaysia, as they are involved in a very small percentage of property transactions, says the Malaysia Property Incorporated (MPI).

General manager Veena Loh Geok Mooi said foreigners owned only two% of total properties transacted last year in Malaysia, although in certain states the percentage was higher, at 25% in Johor and 11.5% in Kuala Lumpur.

"In Johor, property prices appreciated 0.6% over the last 10 years while prices in Kuala Lumpur appreciated 5.5% over the same period.

"In almost all states in Malaysia except Sarawak, foreigners can only purchase properties above RM500,000 and in the past eight years, there has been little price appreciation of properties above RM500,000," she told a media briefing here on Tuesday.

Loh said over a 10-year period, the highest house price appreciation was in states with low population of foreigners — namely, Sabah, Terengganu, Perlis and Pahang.

She said overall for Malaysia, prices started rising after 2009, going up 6.7% and 9.9% in 2010 and 2011 respectively.

"We should not actually label the foreign buyers as foreigners. The main foreign buyers are actually Malaysia My Second Home buyers, expatriates and diasporas.

"The large percentage of foreign owners from Johor are likely to be the Malaysian diaspora residing in Singapore," she said.

Loh said higher property prices have very little to do with foreigners but instead are due to such factors as supply, shortage of prime land, rising building material costs, all-time low lending rate since 2006 as well as speculative activities in the local property industry. — Bernama