Are foreigners responsible for the price increase in Malaysian Properties?

Foreigners snapping up Malaysian properties

SHAREN KAUR

Influx of investors: They are still buying properties worth over RM1 million because they have the money

THERE is an influx of investors from China, Hong Kong, Japan, Singapore and South Korea buying residential properties here, says PropertyGuru.com.my head of marketing Jason Thoe. They are buying the properties for their own stay or as an investment, and their targets are Klang Valley, Penang, Johor and Sabah, he said.

There is concern now of rising property prices. In the last two to three years, property prices have risen by 10 per cent to 30 per cent, mainly in Kuala Lumpur and Penang. The myth faced by the property sector is complaints of houses being overpriced because of higher foreign ownership and speculation. But according to Rehda (Real Estate and Housing Developers’ Association of Malaysia), only less than two per cent of local residential properties are owned by foreigners, and the majority are located in the Kuala Lumpur city centre.

To prevent a property bubble, the government said it is raising the threshold price of residential properties for foreigners from RM500,000 to RM1 million “That is not going to change anything. Foreigners are still buying properties worth over RM1 million. They are buying because they have the money,” Thoe told Business Times yesterday at the launch of PropertyGuru’s property showcase.

On the outlook for 2013, he said there will be higher transactions for properties priced below RM700,000, especially apartments and condominiums. “The new hot spots will be Seri Kembangan and Kajang because of the infrastructure development. Developers with reputable brands will have a good following. “The secondary market in some areas in Klang Valley will also experience growth as first-time property buyers look for affordable terrace houses priced RM800,000 and below,” he said. Thoe said Iskandar Malaysia, George Town and Kota Kinabalu are also experiencing higher property transactions.

“Property prices in Kota Kinabalu have been increasing steadily in the last 10 years. Developers there are launching properties priced around RM1,300 per sq ft, almost on par with Petaling Jaya. The buyers are mainly Sabahans,” he said. On the property showcase,Thoe expects the 13 participating developers to generate more than RM15 million in sales collectively. They include UEM Land, Country Heights, Andaman, Land & General and Naza TTDI whereby properties are priced between RM400,000 and above RM1 million.

This is PropertyGuru’s second major property showcase for the year. The first was held in Penang last week where seven developers generated a combined sales of RM14.2 million from the three-day event.

Source: The Star

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