Speaking to FMT, Hoo Ke Ping noted that the Chinese developers were typically catering to their rich compatriots and had to price their properties at above RM1 million a unit. Only a few Malaysians could afford to buy those homes, he pointed out.

“The problem Malaysian developers will face is that many of them have built expensive homes that they have not been able to sell,” he said.

“So not only is there an oversupply, but the local developers are now facing competition from the Chinese in the high-end property sector.”

Hoo said local developers should sell properties at discounted prices before more Chinese developers, capable of building at cheaper prices, entered the fray.

In September, citing the difficulty house buyers had in securing bank loans, Urban Wellbeing, Housing and Local Government Minister Noh Omar proposed that housing developers be given moneylenders’ licences so they could offer loans to their buyers.

“Local developers complain that house buyers cannot get housing loans and want the Developer Interest Bearing Scheme to be revived, but that is bad for house buyers,” Hoo said.

“Housing loans account for almost 50% of household debt in Malaysia.

“Rather than hoping for people to get loans from the banks, our local developers should consider slashing the prices of their unsold units.”

He said the longer local developers took to clear their unsold units, the greater the competition they would face from the Chinese developers.

Real Estate and Housing Developers Association president Fateh Iskandar Mohd Mansor recently complained that Chinese firms enjoyed incentives which local developers did not, such as tax rebates.

Last month, Bloomberg reported that local developers such as UEM Sunrise Bhd, Sunway Bhd and SP Setia Bhd had been affected by the influx of developers from China into Johor Bahru.