Property ‘cooling down’ in Johor will slow down FDI

Posted: October 11, 2013 in Uncategorized

The property “cooling down” mechanisms to be implemented by the Johor government to slow down foreign property ownership in the state will severely affect foreign direct investment (FDI) inflows, said a well-known developer.

IJM Land, CEO and MD Datuk Soam Heng Choon said foreigners will not stop buying properties in Johor, given Iskandar Malaysia’, development is a major property buying booster, but will definitely slow down their investment participation and dampen buying sentiment.

He said there are many high-end property developments that are currently undertaken in Johor — not to attract the locals but merely to cater to the evergreen foreign demand, especially from Singaporeans.

He also questioned the relevance of the state government’s approvals to all the high-end projects, if it wants to implement the cooling down measures.

“I think the state government must ask themselves, if they want to cool down the market for foreign buyers, then why do they allow more high-end projects?

“The fact is that for higher-end properties in Malaysia, we still need foreign buyers to come and support us, especially for properties over RM1,000 per sq ft,” he told The Malaysian Reserve, at the sidelines of the pre-launch of Seri Riana Residence (second phase) units yesterday.

Soam was responding to questions on a previous news report that the Johor state government is going to impose processing fee on foreign property buyers, between 4% and 5% of the property value purchased.

The move, which indirectly enables the state government to control the sale of properties to foreigners, was a drastic hike if compared to the fixed rate of RM10,000 that the state authorities impose at the moment.

IJM Land has five development projects in Johor, namely serviced apartments such as D’Ambience at Permas Jaya, Epic at Iskandar Malaysia and Suriamas Suites in Kampung Serantau, while its higher-end projects Nusa Duta at Persisiran Perling and Sebana Cover are a mixture of townhouse, resort and bungalow.

“Implementing new policies or changes in existing policies are not something new to us.

But at the same time, we want a clear policy with efficient enforcement,” he said, adding that if the Johor government imposes such cooling measures on foreign buyers, it will not affect IJM Land as much as their developments are affordable housing projects, not high-end.

He said most of IJM Land’s projects in Johor are priced around RM400,000 or less.

source

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