Budget 2020: Lowering the threshold for foreigners will address property overhang, says PM

KUALA LUMPUR: Lowering the threshold for foreigners to buy property here will address the country's property overhang issue, says Tun Dr Mahathir Mohamad.

The Prime Minister said there are properties that need to be sold off.

“This is limited to flats (apartments and condominiums), and not landed property.

“We need to sell off these properties. Of course, there will be foreign buyers but the local buyers will not be cut out just because there are foreigners buying at lower prices, ” he told a press conference after the Budget 2020 speech on Friday (Oct 11).

He said this when asked if lowering the threshold would add to property market speculation.

Finance Minister Lim Guan Eng, who was also at the press conference, said the initiative was limited to condominiums and apartments and not landed property.

“If you are afraid of foreign buyers buying, now there is a supply overhang as the Prime Minister said.

“So if locals want to buy, they can buy. But they are not buying – so, this is where you have a surplus, ” he said.

Lim also dismissed the notion that developers would take the opportunity to increase the price to over RM600,000 for foreigners.

“I don't think foreign buyers are that stupid to buy houses which do not reflect market value.”

Earlier, Lim had announced that the threshold for foreigners to purchase urban high-rise properties will be reduced from RM1mil to RM600,000 next year.

In his Budget 2020 speech in Parliament, Lim said this was to reduce the supply overhang of condominiums and apartments that amounted to RM8.3bil in the second quarter of 2019.

On a separate matter, Dr Mahathir said Putrajaya has not received any official notification that India is considering restricting imports after his remarks regarding Jammu and Kashmir at the recent United Nations General Assembly.

“That is only reported but we have not received anything official, ” he said.

It was reported that India, which was Malaysia's biggest buyer of palm oil in the first nine months of this year, is now considering restricting imports.

Quoting sources, international news wire Reuters said India is looking at ways to limit the imports of palm oil and other goods from Malaysia.

At the UN General Assembly last month, Dr Mahathir said India had “invaded and occupied” Jammu and Kashmir.

He had also asked India to work with Pakistan to resolve the matter.