New buyers move into Forest City as Chinese steer clear

Buyers from China initially accounted for 80% of Forest City purchasers but the number has now dropped to 55%.

PETALING JAYA: Buyers from the Middle East, Indonesia, Singapore and India are replacing Chinese nationals in snapping up properties in the Forest City project, The Malaysian Reserve (TMR) reported.

The business daily said Chinese nationals, who previously formed the bulk of purchasers in the multi-billion high-end property enclave, had shied away after Beijing clamped down on capital outflow in 2017.

The US$100 billion (RM389 billion) project, built on four man-made islands in the Straits of Johor, is developed by Chinese property developer Country Garden.

Forest City is estimated to house a population of 700,000 upon completion.

TMR quoted property consultant Bruce Lee as saying sales in the project had started to pick up in the first quarter of this year after taking a hit last year.

He said prior to Beijing’s capital control, buyers from China accounted for 80% of the purchasers, while the balance of 20% came from other countries.

“There are still buyers from China for the Forest City units, but the percentage has dropped to about 55%.

“The balance of the buyers comprise Singaporeans and Indonesians, accounting for 25%, followed by the Middle East, India and other Asean countries at 10%,” Lee told TMR.

Buyers from East Asian countries like Hong Kong, Taiwan and South Korea account for another 5% of the sales, while the remaining 5% are from Europe.

Worries heightened that the project would not be able to find buyers after China in early 2017 restricted capital outflow to shore up its depleting foreign reserves and stem a slide on the yuan.

The developer had to shut down its showroom in mainland China while it turned elsewhere to find new buyers.

Lee said the improvement in sales for the first quarter was aided by the affordability for foreigners and the benefits from the Malaysia My Second Home (MM2H) programme.

The MM2H programme was introduced in 2002 to attract foreigners to live in Malaysia, especially those who had already retired or who wanted to conduct business in the country.

TMR reported that from January to August 2017, Chinese nationals dominated the MM2H programme with 1,439 approved applications, or 46.7% of the total foreigners allowed to stay in the country.

South Korea came in second with 278 applicants (9%), Bangladesh 253 (8.2%), Japan 179 (5.8%), Hong Kong 151 (4.9%), the UK and Northern Ireland 113 (3.7%), Taiwan 80 (2.6%), Australia 66 (2.1%) and Singapore 60 (1.9%).

The US had 55 approved applicants, while the remaining 410, or 13.3%, were from other countries.