Image from The Malaysian Insight
Johor tops the list of having the highest property overhang in Malaysia based on NAPIC’s Property Market Report H1 2019 – 18.8% (6,195) residential units and 70% (11,371) serviced apartments.
It was announced in Budget 2020 that the threshold for foreign purchasers will be lowered to RM600,000 compared to the previous limit of RM1 million. This move is intended to combat property overhang in Malaysia and it is only restricted to properties in urban areas.
Johor Housing, Communications and Multimedia committee chairman Dzulkefly Ahmad believes that this initiative would not create competition among local buyers. According to a report by The Star, Dzulkefly explained that only strata-type properties possessing a Certificate of Completion and Compliance (CCC) for more than nine months were available for purchase by foreigners.
There is a possibility that the CCC might be longer than the said period if the sale was made by the developer during construction. This means such properties have been offered for a long period of time but there was no interest from local buyers. As such the issue of competition should not arise,” he said.
The policy will also be subject to strict requirements and will be effective from 1 January 2020 to 30 September 2020. The lowered threshold for Johor properties will be limited only to multi-storey properties such as condominiums, serviced apartments and SOHO and is not applicable to landed properties.
Dzulkefly also warned that developers should not see this as an opportunity to continue building high-end properties in Johor. He also added that other measures included raising the levy for foreign ownership to 5% or RM30,000 or whichever is higher from 2% or RM20,000 or whichever is higher.
Explore Johor Bahru’s property market insights, visit www.propertyadvisor.my