Lower Threshold for Foreign Home Buyers Open to Abuse, Warns CAP

GEORGE TOWN: The Consumers Association of Penang said the lowering of the price threshold for foreigners buying properties in Malaysia could be abused by some to launder their money and even drive up prices of goods.

Its president Mohideen Abdul Kader said the reduced threshold from RM1 million to RM600,000 could lead to undesirable people putting their ill-gotten gains in homes here.

He said it would also increase speculation in property prices.

“Can the ‘Malaysia My Second Home’ programme unwittingly enable some applicants to launder their money, particularly from offshore accounts, in the form of property investment in Malaysia?

“The government has to be cautious about this possibility,” he said in a statement today.

Mohideen said the reduction of the threshold was disappointing, calling it a “fire sale” that would bring an influx of “big spenders” which would drive up prices of goods.

He said the move would also make developers “reckless” and continue to build luxury homes “knowing the government would come to their rescue”.

“The developers had overproduced luxurious housing units even though there were already signs of a softening market as early as 2017. They should not be bailed out. Why should the government show favour to the developers?

“In fact, the government’s priority should be for housing the lower income group, but developers are not keen on producing affordable housing,” he said.

He said the earlier RM1 million cap was already attractive to foreigners when the ringgit was weaker compared to the US dollar.

In the 2020 Budget proposals tabled on Friday, the government announced the move to lower the price cap to reduce unsold properties, reported to total RM8.3 billion in the second quarter of 2019.

credits to FMT News – Property