KUALA LUMPUR: The country’s largest property developer group has defended the government’s decision to lower the threshold for foreigners to buy property from RM1 million to RM600,000 as it would help them to release unsold houses and reinvest in affordable housing.
Speaking to reporters on the sidelines of the 2020 Budget Forum, Real Estate and Housing Developers’ Association (Rehda) president Soam Heng Choon said the unsold houses affected the developers’ balance sheet.
Soam also dismissed claims that the lowering of the threshold would lead to developers raising the prices of their properties to RM600,000 for foreigners to buy.
He said this was because developers needed to determine the selling prices of their property before launching a project, and part of the process of obtaining approvals and licences from the housing and local government ministry.
“So, developers cannot arbitrarily increase the price from RM500,000 to RM600,000 because of the lowering of the threshold,” he said.
The National House Buyers Association had said the reduced threshold would lead to inflation and a shortage of affordable homes for Malaysians as developers switch to easier-selling property at higher prices to attract foreigners.
Soam also said the most recent National Property Information Centre (Napic) report noted that a big chunk of unsold units were in the category of below RM300,000, meaning there were still many affordable properties without buyers.
He said the lower threshold only applied to high rise, strata properties in Kuala Lumpur, major cities in Selangor, Johor Bahru and Penang Island, where there were strata properties above RM600,000.
These unsold properties, he said, were launched three to four years ago during the “better days” of the property market, so it was unfair to blame developers for putting out products which people did not want.
“Today, the product and pricing are important, not just location.”
Soam, however, conceded that state governments and not Putrajaya had the final say on the threshold but they should realise a large part of their revenues came from property-related businesses.
“If there are no new developments in the state, the state government can’t impose development charges and so on, so where will they get the money for their state budget?” he asked.
He said it was sad that Putrajaya’s well-intentioned initiative had drawn controversy, pointing out that one state “in the south” had allowed foreigners to buy properties in one project for RM500,000 since its launch.
As far as developers were concerned, he said, they would prefer to sell to Malaysians as the process was much easier.