Confusion over property policy

  • Nation
  • Tuesday, 28 Aug 2018

JOHOR BARU: The Prime Minister’s announcement that foreigners will be barred from buying properties at the multi-billion-ringgit Forest City has sparked a scramble among developers and buyers.

They want more details and greater clarity on the government’s seemingly new policy.

The Chinese developer of Forest City, Country Garden Pacificview Sdn Bhd (CGPV), said Tun Dr Mahathir Mohamad’s decision did not match what was discussed at a closed-door meeting on Aug 16.

It was held between the Prime Minister and founder and chairman of Country Garden Holdings Yeung Kwok Keung prior to Dr Mahathir’s visit to China.

“At the meeting, Dr Mahathir re­­iterated that he welcomed foreign investments which could create job opportunities and promote technology transfer and innovations that could benefit Malaysia’s economic growth and job creation,” said a CGPV statement yesterday.

The developer of the project in Gelang Patah said it had complied with all laws and regulations and had the necessary approvals to sell to foreign property buyers.

It said pursuant to Section 433B of the National Land Code, a foreign citizen or a foreign company could acquire land in Malaysia subject to the state authority approval.

“We do not issue any permanent residency (PR) to the foreign buyers,” the statement read.

“We are currently in touch with the Prime Minister’s Office for clarification as we believe Dr Mahathir’s comments may have been taken out of context in certain media reports.”

Yesterday, Dr Mahathir said he was against the idea of building a city for foreigners.

Urban greenery: A file photo of prospective buyers looking at a model of development at CGPV’s Forest City showroom in Johor Baru. — Reuters
Urban greenery: A file photo of prospective buyers looking at a model of development at CGPV’s Forest City showroom in Johor Baru. — Reuters

Speaking at the Cities 4.0 and Business 4.0 International Confer­ence and Exhibition, he said Forest City was not built for Malays­ians.

“One thing is certain – the city that is going to be built cannot be sold to foreigners. Our objection is because it was built for foreigners and was not meant for Malaysians. Most Malaysians are unable to buy those flats,” he said.

His statement was interpreted to mean that Malaysia was prohibiting foreigners from buying the residential units at Forest City, which were largely sold to mainland Chinese buyers.

Having just returned from China, where he invited Chinese firms to invest in Malaysia, Dr Mahathir’s comment stirred confusion.

Forest City is a joint venture between the Guangdong-based dev­eloper and Esplanada Danga 88 Sdn Bhd, an associate company of Kum­pulan Prasarana Rakyat Johor.

Spanning 13.86sq km on four man-made islands, Forest City has been touted as a “global destination” and a smart and intelligent city near the second link bridge of Iskandar Malaysia and adjacent to Singapore.

According to South China Morning Post, shares of Country Garden Holdings see-sawed in yesterday’s trading amid confusion over Dr Mahathir’s comments.

The stock, which had risen by as much as 3.9% earlier, returned almost all of its gains for the day on the Hong Kong exchange following Dr Mahathir’s comments.

KGV International Property Con­sultants (M) Sdn Bhd director Samuel Tan Wee Cheng said the ruling should be implemented after the government had discussed with the stakeholders.

“A sudden announcement like this is sending a wrong signal to foreigners planning to buy residential properties in Iskandar Malaysia,” he said.

Johor Real Estate and Housing De­­velopers Association branch chair­­man Datuk Steve Chong Yoon On said clarification would help clear uncertainty and confusion over the project’s status.

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