Rahim and Co International CEO Siva Shanker told FMT the reduction of the threshold from RM1 million to RM600,000 was not a “magic pill” for the problem of property overhang the nation was facing.
Siva said this was because foreign ownership of properties in the country had always been small.
Nevertheless, he said, the new threshold could attract Singaporeans because RM600,000 converts to only S$200,000.
“There may be a fair number of Singaporeans who may see it as an investment opportunity,” he said.
Siva, a former president of the Malaysian Institute of Estate Agents, called for consistency in the policy, saying this was important to investors.
If a unit bought for RM600,000 were to increase in value to RM800,000 after a few years and the government were to raise the threshold to RM1 million, the owner would not be able to resell it to a foreigner, he said.
“The investor will then be stuck.”
Henry Butcher Malaysia chief operating officer Tang Chee Meng noted that prices were above RM1 million at KLCC, Mont Kiara and other places that many foreigners might be interested in.
“Although the reduction of the threshold price may stimulate some sales to foreigners, it is our view that it may not really lead to foreigners flooding the market,” he said.
“Further, as land matters come under the purview of state governments, it is possible that some states may not adopt the RM600,000 floor price and may maintain their current price threshold or reduce the figure by a smaller margin.”
Property agent Yap Seng Huat is more optimistic, saying he believes the move will draw the interest of buyers from China and Hong Kong.
“There are good properties in KL under RM1 million which can give good returns on investments, especially in areas around KLCC and Mont Kiara,” he said.
“The move will help local developers and property owners dispose of their unsold units, and this is good for the property market.”
Real Estate and Housing Developers’ Association president Soam Heng Choon recently defended the government’s decision, saying it would help developers release unsold houses and reinvest in affordable housing.
The properties covered under the lower threshold are limited to high-rise stratified properties in George Town, Kuala Lumpur, Johor Bahru and some cities in Selangor.