Applicants for the Malaysia My Second Home programme are mostly retirees from more developed countries including Japan. FILE PIC

WITH RM20 billion worth of residential overhang in the local property sector, Malaysia should be more open to foreign buyers with higher spending power to enter the market.

Encouraging more foreigners to take up the Malaysia My Second Home (MM2H) programme and invest in Malaysian properties could help ease the glut in the property sector, said the Malaysian chapter of the International Real Estate Federation (FIABCI).

Its president Michael Geh said it could help resolve the issue of unsold units in the country.

The Malaysian Institute of Professional Estate Agents and Consultants (MIPEAC) concurred with FIABCI.

MIPEAC president Francis Loh said it would be a waste not to strengthen the promotion of MM2H and encourage more foreign investments in the sector.

MM2H

MM2His a housing programme catered to foreign retirees and working expatriates who are keen to have a second home in Malaysia.

Foreigners can buy a penthouse, condominium, landed properties including terraced houses, semi-detached homes, villas and bungalows, commercial property, industrial property, agricultural land and land that are priced more than RM1 million each in most of major states.

They are not allowed to buy properties valued less than RM1 million, those built on Malay Reserved land, low- and medium-cost residential units and properties distributed to Bumiputera interest in any development projectas determined by the state authority.

Quite a few expatriates in Malaysia have opted to purchase a residential property either as a second home or for retirement purposes in the last two to three decades.

The applicants are mostly retirees from developed countries such as United States, Europe and Japan, as well as China.

Since its inception in 2002 up to August 2017, the MM2H programme has granted close to 36,000 MM2H visas. A bulk of the approved applicants come from Asian countries (28,652), followed by Europe (4,291),the US (1,334), The Pacific Islands (1,019) and Africa (432).

MIPEAC believes that more can be done to encourage foreign buyers and investors to enter Malaysia’s property market.

“In general, efforts to drive in foreign investments in other segments like commercial and industrial properties should be taken more seriously as well. High-end developments can be marketed more intensively globally, together with the on-going efforts done on the tourism sector.

“Although stricter background checks for MM2H applications have been implemented recently, MIPEAC applauds the Tourism, Arts and Culture Ministry’s efforts to speed up the approval process of the backlogged applications by setting up a special task force,” said Loh.

ICT SECTOR CAN BOOST INTEREST

Loh said MIPEAC believes growth in the information and communication technology (ICT) sector in Malaysia can help attract more professional foreign workforce, which would in turn lead to increased property purchases by expatriates.

Initiatives taken by some developers that include tour groups with visits to sales gallery as part of the package also deserve credit, as these will not only help clear property stocks but also put Malaysia in the limelight as an ideal investment location with direct help from experienced sales agents.

“These foreign buyers, especially under MM2H, are mostly genuine buyers who are keen to reside, work and let their children study in Malaysia. We should not think of this as an invitation to allow more thick-pocketed speculators into the market, but as one of the good solutions to improve our economy,” said Loh.

It has been reported that Chinese nationals make up most of foreign property buyers in Malaysia, and a lot of them make purchases in cash.

“To date, foreigners own less than three per cent of Malaysian real estate, which indicates that it is still safe to promote our unsold homes to them and that they are not the main factor for the skyrocketing prices we’ve seen in the past few years,” he added.