KUALA LUMPUR: The National House Buyers Association (HBA) said the lowering of the floor price for foreign property buyers sends the wrong signal to developers.
HBA honorary secretary-general Datuk Chang Kim Loong was commenting on the Johor state government’s proposal to lower the current RM1mil price threshold to RM600,000 in an effort to reduce its stock of unsold properties.
Johor has the highest number of unsold completed properties. Chang said such a move will incentivise developers to target foreigners instead.
“This proposal is similar in spirit to the proposal by the Housing and Local Government Minister to market unsold high end properties to foreigners, in particular from Hong Kong and China.
“In the case of Johor, the natural target market will obviously be Singaporeans or professionals working in Singapore, ” Chang said.
He said although this proposal seems to solve the issue of unsold high end properties, it has the consequences of encouraging developers’ to ignore building affordable properties, which cost below RM300,000, and to focus on those costing more than RM600,000 with the aim of selling to foreigners.
He said the situation will be more acute in Johor.
“If the threshold is reduced to only RM600,000 as proposed, this is less than S$200,000 and will definitely open the floodgates.
This will inadvertently push housing developers in Johor to raise the prices in the range of RM400,000-RM500,000 to beyond the RM600,000 to capture the lucrative Singapore market; locals would be squeezed out of Johor’s housing market.“Is this what the Johor State Government wants? The duty of every Government is to ensure that their citizens have access to affordable housing, and not assist foreigners to buy properties cheaper compared to their home country, ” he said.
HBA is aware of the the problem of unsold high end units but this problem is “self-inflicted” as a result of greed.
“Hence, it is the developers who must solve their self-inflicted problem. They will have to think of ways to off-load such properties such as offering discounts or other incentives to attract local buyers.
He urged the Johor state government to rethink its proposal and to leave marketing to the developers themselves.
On Thursday, AllianceDBS said Malaysia’s property market is only expected to see “a meaningful recovery” by 2023.
Overbuilding of residential, commercial and office units has translated into an ever-growing property overhang. The glut has become a key structural issue, apart from the affordability problem.
The government will be releasing first half year property transactions and the size, ringgit value of unsold stock today.
Read more at https://www.thestar.com.my/business/business-news/2019/09/23/hba-lowering-property-price-for-foreigners-will-send-wrong-signal#dZlHsKzy7f8feffg.99