Malaysia Budget 2014 and foreigner buy property policy in Iskandar Malaysia

Malaysia government’s last month Malaysia Budget 2014 announcement to increase foreigners buy property in Malaysia entry level raised from 500 thousand Malaysia Dollar to 1 million Malaysia Dollar. However, yesterday on 8 Nov 2013 Johor State government said that government will conditional allow foreigner home buyers in purchasing Johor property under RM1 million.

According to Malaysia Chinese newspaper Sin Chew Daily Newspapers, Johor State Housing and Local Government executitive councillor Datuk Abdul Latiff Bandi mentioned that the new housing developments projects that Johor Legislative Council has approved previously will continue follow the old property purchasing policy, which refer to foreigner home buyers may buy property above Malaysia dollar 500 thousand.

Latiff Bandi attended to Malaysia Johor Real Estate and Housing Developers Association (REDHA) held’s Malaysia Housing Expo (MAPEX) and express this after being asked following the expo exhibition.

According to Malaysia Budget 2014 release last month, the plan list down that foreigner who buy property in Malaysia must purchase RM1 million and above with effective 1 Jan 2013 and the foreigner levy will be adjusted from current 10 thousand to 2% of the property price which will take effective at 1 May 2014.

Following the Malaysia Budget 2014 announcement, Johor state government is reviewing property ownership policies for overseas home buyers looking to invest in the Iskandar Malaysia areas. Property market in Iskandar Malaysia has been doubling within this few years seeing the successfully of capital in flow of real estate investments attracted by government business friendly and tax incentives given to foreign companies and corporate to set up their businesses in Iskandar Malaysia region.

Few property developer mentioned that foreigner who buy property in Johor is not many and within 10% only. This is mainly because government has other restriction in place that is reason why speculation on Johor property market is not obvious. Property developer said that they wouldn’t build over million new property to purposely available for foreigner as such property market and demand for foreigner is limited.

Malaysia Budget 2014

Johor land price in historical record high

Johor land price fetch historical new high in transaction yesterday 10 Dec 2013. Johor Sultan sold 6 pieces of land within Special Economic Zone Iskandar Malaysia with the total land coverage of 16 acres to China developer R&F Properties in record price of RM4.5 billion. The land price was transacted at RM890 per square feet, breaking the record of previous China developer Country Garden that bought the land at Danga Bay with RM363 per square feet early this year January 2013.

According to report submitted by the Guang Zhou developer R&F Properties to Hong Kong Securities Exchange, it bought the land in Iskandar Malaysia with RM4.5 billion after negotiation with Johor Sultan Ibrahim. Report said R&F Properties will pay RM100 million as down payment, and the remaining payment will be paid within following three years in four time method.

The Chairman of R&F Properties Mr Li said this is the company first foray to properties market oversea. and first oversea land purchase. He has confidence to Malaysia property market. He mentioned that Malaysia has huge Chinese population and current government policies to Special Economic Zone Iskandar Malaysia has great opportunities and benefits in offer and attracting foreign investor and oversea buyers. So, this is very suitable for the company expansion and first foray to oversea market. "Malaysia has strong economic fundamental and supported by large human population and rather high birth rate, its property market has strong growth potential."