The Malaysia government has announced that it will lower the threshold for foreign buyers to purchase high-rise properties in urban areas from RM1 million (S$330,000) to RM600,000 (S$197,000) in a bid to reduce the number of unsold apartments in Malaysia's major cities, which are worth RM8.3 billion. The lowered threshold is only applicable to existing condominium and apartment units that are unsold and will only starts from 1 January till the end of 2020.
In Malaysia, property units costing RM1 million and above are usually deemed luxury properties. Within Johor, there are 51,000 unsold properties, of which between 60 per cent and 70 per cent are priced at RM600,000 and above.
The move is to reduce the glut of high-rise homes in the country but has attracted flak from local buyers, who are worried that property developers will continue to build more condominiums and apartments, and price them at the RM600,000 floor price.
While this may reduce the property overhang, economists are concerned at the cost of a foreign invasion, particularly from Singapore, Hong Kong and China. With the new regulations, Singaporeans can snap up urban high-rise properties in neighbouring Johor that would cost them less than $200,000.