The country’s current investment environment is especially inviting, with no restrictions on domestic funding for foreign investment in local properties, in addition to further deregulation in Foreign Investment Committee (FIC) guidelines.
Foreign acquisition of residential property priced above RM250,000, and commercial property and industrial land valued at RM500,000 and above will not require FIC approval.
However, from Jan 1, 2010, the minimum threshold of residential units that can be sold to foreigners will be doubled from the current RM250,000 to RM500,000.
While other neighbouring countries impose various restrictions, Malaysia allows the purchase of freehold property by foreign purchasers.
Many countries including Thailand, Indonesia and the Philippines do not allow foreigners to buy their freehold property. In Singapore, foreigners are only allowed to buy strata property, except on Sentosa Cove where they can also opt for landed property.
To buy a residential or commercial property in Thailand or Indonesia, a foreigner needs a local partner to get approval for the transaction.
The prices of our property are also much lower compared with those in other countries.
Despite the much better terms, lower prices and the offer of freehold property, foreigners are still not coming in droves to invest.
Of the total property transacted nationwide, less than 5% – around 3.5% to be exact, were purchased by foreigners. This compare with about 25% to 30% of foreign purchases in Singapore today.
It goes to show that by dangling “carrots” alone to entice foreign investors will not carry much weight and attract the right targets to our shores.
So, how can the government’s liberalised environment and industry efforts to promote foreign real estate purchases translate into greater interest from foreign investors?
To set up an international market place for our property, the Malaysia Property Inc (MPI), a joint public-private sector initiative, has been launched to promote Malaysia as the preferred international real estate destination.
The country is targeting RM200bil in foreign direct investment (FDI) into the real estate sector over the next 10 years.
The MPI has been allocated a grant of RM25mil by the government to kick start its promotional efforts through road shows and conferences in various target markets including Britain, Hong Kong, Singapore and the Middle East.
These efforts will go a longer way if they are undertaken cohesively and holistically together with the Tourism Ministry to promote Malaysia as a favourite tourism and second home destination.
One way of showcasing Malaysia is through the “back to basics” gamut of the people’s way of life, culture and religious practices.
Promoting a strong Malaysian identity that reflects the true multi-racial and social-cultural make up of the people will go a long way to cement a stronger bond and acceptance among the various ethnic groups and in the process, raise the country’s attractiveness among foreigners as a worthwhile place to visit or settle down.
The relevant authorities and industry players must understand that foreigners who are adventurous enough to venture out of their “comfort zone” and their home country to buy property in a foreign land have very unique needs.
For those who are considering to retire or set up second homes, what they are looking for is the chance to savour the “local experience” of living in a foreign country.
They are certainly not looking to settle down in another concrete jungle where they may probably come from.
That could explain why Bali and Phuket, despite their largely “laid back” and undeveloped environments, are favourites with foreign visitors and retirees.
Closer to home, Penang, Malacca, Sabah and Sarawak are also favourite attractions among foreign visitors because of their unique heritage and environment.
By leveraging on our uniqueness and the many pluses – a year round tropical climate, affordable cost of living, good infrastructure, and a largely friendly, English speaking and peace loving Malaysians – there are much that the people and country will gain by further harnessing its diversity in this highly globalised and borderless world.
Given the big contribution made by the property sector to the country’s economy – last year the industry contributed close to RM11bil to the economy – efforts by the government and industry players to promote Malaysia’s real estate to the rest of the world should be further harnessed.
And given its close connection to the people’s basic lifestyles and interaction with each other, all Malaysians have a role to play to ensure the efforts are successful.
·Deputy news editor Angie Ng hopes Malaysians will take pride in their strong bond and friendships built over so many generations and leave a legacy that will make our future generations truly proud.
By The Star (by Angie Ng)
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