‘Rescind’ new property rules, new Selangor MB urged

PETALING JAYA: Property players in Selangor are hoping newly-appointed Mentri Besar Azmin Ali will review the recent hike in minimum prices for foreign purchases in the state, which they claim will further dampen demand.

Malaysian Institute of Estate Agents (MIEA) president Siva Shanker said the guidelines that came into force on Sept 1 should be “rescinded.”

“We believe that various stakeholders should have been consulted first before they were implemented,” he told StarBiz, adding that neither the MIEA nor the Real Estate and Housing Developers’ Association (Rehda) was consulted.

Siva also said the announcement of the guidelines could not have come at a worse time.

“The announcement came without warning. During Budget 2014, the Government increased the minimum price for foreign property purchases from RM500,000 to RM1mil. Budget 2015 is just around the corner and there could be new measures to be announced. This will only dampen the market.”

He added that implementating such guidelines did not make sense if Malaysia aimed to turn the Klang Valley into an international, habitable destination.

“If you want to be a true world class city, you need to attract a sizeable population of international occupants. It’s the foreign element that makes it an international city,” said Siva.

PKR deputy president Azmin, who is also the Gombak MP, has replaced Tan Sri Abdul Khalid Ibrahim as Selangor’s new Mentri Besar.

Under the guidelines, the Selangor state government has set a minimum purchase price of RM1mil for the Hulu Selangor and Sabak Bernam districts (Zone 3) and RM2mil elsewhere (Zones 1 and 2).

Citing statistics from the Malaysian Properties Inc, whereby the number of foreign buyers on a national basis was between 4% and 7%, Siva said: “Those statistics apply to foreigners purchasing property mainly within Kuala Lumpur, Johor Baru and Penang.” - The Star

“You rarely get foreigners buying property within the Hulu Selangor and Sabak Bernam areas. So why have these rules?”

Siva noted that the various cooling measures implemented by the Government, which was aimed at keeping property prices in check, only dampened transactions and not the value of the properties.

“Transactions fell 5% and 10.9% in 2012 and 2013 respectively. It dropped 15% in the first quarter of this year.

“However, transaction activity in the first quarter is not usually a clear indication of the full year’s trend. The number of transactions have dropped over the last three years but their value has not.”

Mah Sing Group Bhd chief executive officer Ng Chai Yong said he expected minimum impact from the new guidelines as foreign buyers made up less than 1% of the company’s sales contribution in Selangor.

“In fact, 87% of our launches are priced below RM1mil and our buyers are primarily locals,” he said.