Johor to earmark zones for foreign home buyers

Johor to earmark zones for foreign home buyers
Tan Sri Lim Kang Hoo, Deputy Chairman of Iskandar Waterfront Holdings, at the ground breaking ceremony or River City @ Danga Bay

Johor will soon unveil new laws that will restrict foreign home buyers to several new "international zones" in order to protect locals from being priced out of the housing market, said officials yesterday.

Details of the plan will be unveiled next month or in August to get feedback from the public and property industry before a final decision is made, said Datuk Abdul Latif Bandi, Johor's Minister for Local Government and Housing.

The move follows complaints that the tens of thousands of residential units being constructed by dozens of developers are mainly targeted at foreigners, including those from Singapore.

These units, including luxury condominiums and three-storey landed homes in gated communities, are often priced beyond the reach of most Johoreans, officials say.

Johoreans have also seen the impact on home prices when developers are allowed to let foreigners buy up to 50 per cent of their units priced RM1 million (S$368,000) and above, all over Iskandar, observers say.

The Malaysian government's move last year to set a minimum price of RM1 million for foreign buyers has worsened the situation as many developers keen on selling to foreigners now put RM1 million as the minimum price, Mr Abdul Latif said.

"We do not want foreigners to buy all over (Johor), as prices would then go up and the locals can't afford them," he said. "We will decide on these areas after engaging with the public and others."

Foreigners are generally allowed to buy into property projects in Iskandar with a maximum quota of 50 per cent of the units as long as its minimum price is RM1 million.

They are barred from buying units built for low-income Malaysians or for the indigenous bumiputera and Malay communities.

Mr Abdul Latif had previously said that the new zones would also allow the government to charge a "different" property tax rate for foreign buyers.

The Malaysian government last year effectively created the first "international zone" in Iskandar by allowing foreigners to buy units without any bumiputera quotas in the upcoming Medini township - just across the Tuas Second Link.

Another upcoming township that has shown interest in selling its houses to foreign buyers without quota limits is the Forest City luxury reclamation project.

Tan Sri Lim Kang Hoo, deputy chairman of developer Iskandar Waterfront Holdings, said he supports having local housing zones to keep prices affordable for Johoreans.

But he reminded Malaysians that Iskandar can thrive only if more foreigners snap up units there.

reme@sph.com.sg


This article was first published on May 16, 2015.
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