The property market in Kuala Lumpur is experiencing a surge in prices of high-end properties, largely due to the increasing interest from foreign buyers. According to Universiti Teknologi Malaysia property economics and finance associate professor Dr Muhammad Najib Razali, this trend is making it challenging for middle and upper-middle-income Malaysians to afford properties in major cities where prices are already high.
Dr Muhammad Najib also highlighted the potential danger of developers focusing more on catering to the demands of foreign buyers, which could lead to a reduction in the availability of affordable housing for Malaysians. This imbalance in the housing market could result in certain locations or property types being predominantly owned by foreigners, further limiting options for local buyers.
Tourism, Arts and Culture Minister Datuk Seri Tiong King Sing revealed that Chinese nationals hold the highest number of Malaysia My Second Home (MM2H) passes, followed by South Koreans, Japanese, and Bangladeshis. The interest from Chinese buyers has seen a significant increase, with inquiries rising by 42% in the first quarter of this year, as reported by Juwai IQI, an international real estate technology group.
Real Estate and Housing Developers’ Association Malaysia president Datuk Ho Hon Sang explained the new MM2H programme requirements, which include three tiers of eligibility based on property prices. Foreign buyers must purchase properties priced at RM600,000 and above for the Silver tier, RM1 million and above for the Gold tier, and RM2 million and above for the Platinum tier.
The growing interest from foreign buyers in high-end luxury homes priced at RM1 million and above near areas like Bukit Damansara, Bangsar, and Kenny Hills has led to an increase in demand for such properties. However, Muhammad Najib cautioned that this could potentially lead to property agents inflating prices to attract foreigners, creating speculative purchases and market instability.
While the influx of foreign buyers brings financial and investment benefits, there is a need for the government to enact laws or modify existing ones to protect local buyers and prevent further widening of the gap between foreign investors and residents. Property agent Nor Robiah Abd Rahman reassured that there are still plenty of opportunities for Malaysians to purchase affordable properties, as developers continue to build such housing options.
Foreign housebuyers are also restricted from purchasing certain types of properties, such as low-cost houses and Malay Reserve Land, and must follow specific procedures and obtain approval for transactions. They are also required to pay consent fees when buying properties in Malaysia, ensuring that there are regulations in place to govern foreign ownership in the property market.
In conclusion, while the influx of foreign buyers may impact the property market in Kuala Lumpur, there are still opportunities for local buyers to access affordable housing options. It is essential for the government to monitor and regulate foreign ownership to maintain a balanced and inclusive housing market for all residents.