Property News Page Singapore, Malaysia and Overseas

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Business Times - 11 Apr 2012

 

You may have to splash out more for that M'sian property

 

KL could raise floor price for foreigners purchasing homes

 

By PAULINE NG

IN KUALA LUMPUR

 

SINGAPOREANS looking to buy properties in Malaysia may see the bar raised.

 

Malaysia is mulling a two-fold increase to the floor price of residential properties purchased by foreigners in a bid to prevent prices from spiralling too rapidly.

 

The possibility of a revision to existing guidelines to raise the minimum price to RM1 million (S$417,000) from RM500,000 was flagged by The Star.

 

In a report yesterday, the local daily cited unnamed sources as saying that the measure was 'in the pipeline', with a forthcoming announcement to be made by Nor Mohamed Yakcop, minister in the Prime Minister's department heading the Economic Planning Unit.

 

It did not say when it would be implemented.

 

One of the sources told The Star that selected growth corridors such as Iskandar Malaysia might be less affected by the proposal, in that a lesser minimum threshold might be applied - RM800,000 for example - to assist with their development success.

 

The government has continued to come under pressure over affordability issues despite recent measures to cool the property market.

 

Pushing the floor price up for foreign buyers - especially in landed properties - could be a welcome move in the eyes of young middle-class Malaysians frustrated with soaring real estate prices when starting salaries have advanced little in two decades.

 

Many believe that foreigners have little difficulty stumping out RM500,000 for homes because their currencies tend to be much stronger.

 

Property consultants say they were aware of the possibility of the new rules, but believe that the move is still at the proposal stage. 'It's a flyer to check public response. Not all states will agree,' Malaysia Property Inc chief executive Kumar Tharmalingam told BT.

 

Foreign buyers of Malaysian property come mainly from China, Singapore, Japan and South Korea, the newspaper said.

 

Even so, foreigners only account for an estimated 2 per cent of the residential market which saw robust growth last year.

 

The volume and value of properties sold last year was the highest in the past five years, according to the Property Market Report 2011 by the Finance Ministry's Valuation and Property Services Department, rising by 19 and 22 per cent respectively from a year ago.

 

Landed property remain popular. They recorded the biggest jump in prices last year, with link houses in Kuala Lumpur registering gains of 8-13 per cent, according to the 2011 property report.

 

Following a revision in lending guidelines this year that benchmark an applicant's criteria to meet his loan obligations against his net rather than gross income, bankers and property players have reported slower loan applications and a softer market, with the rejection rate estimated at 20 per cent.

 

Some reckon that the central bank ought to have tightened lending criteria a year or two ago as ample liquidity and easy credit terms encouraged speculators to buy with a view to flipping the properties before the payments were due.

 

Owing to high take-up rates, developers continued to build and to raise prices. But going by the assortment of auction notices found around the suburbs, many borrowers appear to have defaulted on their loans, especially those taken for apartments.

 

 

[Neost]

Good news for property owner in Singapore......

 

lai lai lai, come buy property in Singapore.