Expert warns of surge in upmarket property prices
‘A new wave of Chinese investors, wealthy and unconstrained by Beijing’s capital controls, are coming to Malaysia.’
PETALING JAYA: A real estate expert has warned of a surge in upmarket property prices as wealthy Chinese investors turn their attention to Malaysia, now that they are finding it difficult to invest in Canada, Australia, Singapore and Hong Kong.
Speaking to FMT, chartered surveyor Ernest Cheong said the investors in this new wave were much richer than those targeted by developers in Johor and would be snapping up expensive properties in established Klang Valley areas like Bangsar and Damansara.
“If there’s a sudden influx of Chinese money coming to buy properties in these areas, it will push up the already high prices of properties to the point that even upper-middle-class Malaysians can’t afford them.”
He said this wasn’t a new phenomenon, having already happened in Canada and Australia.
“The Chinese money went in a big way to Canada and Australia. In the end, the authorities there took measures to make it difficult for the Chinese buyers to buy or keep their properties.”
Last December, an article in Bloomberg said Chinese investors eyeing properties in the Canadian city of Vancouver were shifting their focus to Seattle in the United States following the introduction of a 15% tax on foreign homebuyers.
In September, the Financial Review reported that Chinese buyers were looking elsewhere after Australia’s Big Four banks started restricting lending to foreign buyers and the Australian Taxation Office made it compulsory for foreign residents to pay a 10% withholding tax on properties costing more than A$2 million.
Cheong said these new investors had a lot of money parked overseas and would not be constrained by Beijing’s capital control measures.
He said he believed that the crackdown in Canada and Australia – and also in Singapore and Hong – was their real reason for coming to Malaysia. It wasn’t the lower cost of living that was attracting them, he added.
“I feel it isn’t necessarily a good thing that rich Chinese buyers are looking to Malaysia as the demand may not be organic but due to external factors,” he said.
He urged the government to implement strict measures to prevent the prices of high end properties from skyrocketing to levels that would be beyond the reach of even well-to-do Malaysians.
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