while this is old news, i would like to
bring to your attention for those people who missed the small article that
shouted rules on foreign property buy eased. for more
complete report, you can find the article in
here. furthermore, if you’re into this economy stuff and want to know more
about our economy (and don’t know yet), you could go
latest economic conference slides. basically, what the news said is that
foreigners can buy properties in Malaysia without seeking foreign investment
committee and there will be no conditions regarding the usage and limit to the
number of units purchased.
while i am all for free market economy of
supply and demand (e.g. why do we have to subsidise the fuel pump price, might
as well use the market price then we’ll be subsidising less of those people who
can afford to have huge-engined mpv’s and luxury cars rather than people on
kapcai and use the money to pay for better schools, build more hospitals and
pay more salary to those blue-collared workers, teachers, doctors, armies,
policemen and politicians with the hope of less corruption when they have more
legal income), i don’t quite agree with this decision. this is one of the
gomen’s decision that would affect me definitely and most if not all of you
malaysi@n readers, including butterflutter
who is considering buying a property. read on if you’re curious to find out why.
first, let me lay out all the rationale of
what i think why the gomen is doing so. one of the stated reason is to reduce
bureaucracy. while removing bureaucracy in this case is definitely applicable
to foreigners seeking to acquire those properties, the same bureaucracy will
still burden us. so no gain for us. not included however, my theory is that we
have an oversupply in these sectors that our domestic demand couldn’t cope with
the supplies coming on-stream that gomen had to find alternative demands i.e.
foreigners or the residential sector housing bubble would collapse in no time
due to oversupply. looking at all the medium to high-end developments that we
see nowadays, basically all landed properties in good quality locations are
going for nothing less than 300k. while those macro economic gurus would be
cheering saying that this is a good thing and bring more foreign capital into
our very small economy, it is going to be at the expense of us, the local
people. to those uninitiated, there was a limit before (500k) so basically the
gomen has just reduced the foreign limit from 250k to 500k (please correct me
if i'm wrong).
i have to admit that the previous limit of 500k is a
reasonable policy, one reason is definitely because i have not been looking at
such property yet. maybe later, kalau ada rezeki. but when the floor is reduced
to 250k, that is when the price range will be included into my shopping list,
sooner or later. while maybe it will not be affecting me and a lot of other people
per se due to our bumi status and quota stuff (but still, a friend of mine had
some problem buying some 400k+ property which was shown to be available at the local gomen’s office but developer said no such thing and he had to use some political maneuvering to buy the property but that’s a different issue altogether), there would definitely be both short term and long term impact to property prices in our beloved country.
for example, if some “high-end” developer with a reasonably good demand had decided to price its products between 200k to 250k, the announcement would make them having second thoughts and happily rising the price of the package to in access of 250k to be eligible for the foreigners market. similar rationale could also be used for properties of the higher spectrum up to 500k range which would be included into the floor price reduction.
while the policy clearly favours the business climate, we
consumers would definitely be on the losing end. i remembered that when i started working with starting salary of 2k+ and without a rich father to finance me, it would be insane to commit yourself to a 200k mortgage which would leave you to a virtually nothing after the payment of the car finance. don’t need an accountant to tell you that. but still, i was not sane enough that i still committed
to one not long after. but to think of all these new executives who have just
started working with that kind of salary to commit to a 300k (which is about
the price of a reasonably-located double storey house in klang valley
nowadays), it is even more mind-boggling. should the price range goes even
higher to 400k, all those not-so-high-flyer with average earnings executives can
even forget to dream about owning a landed property now and forever.
while foreigners are not to be blamed for our sky-high
property prices, they will eventually take part in making sure that we can’t buy our dream property later. while the other extreme option of not allowing foreigners to buy properties at all is definitely not a good one (you can ask
a comfortable house with the insane rental rates in doh@ which gomen does not
allow foreign ownership at all), such policy decision should be delayed further
until our buying power itself could compete internationally.
how can our buying power compete internationally hence how long does the gomen need to wait, you may ask. one of the means is to have a stronger currency. let me give you the forex as today to our precious rm (as of
03-jan).
us$1 = rm3.55
uk£1 = rm7.01
sing$1 = rm2.32
so, for rm250k, it’s going to be about sing$107k which is
about 4 years or less of their new execs salary or £36k which is like maximum one year and a half salary of our friends in uk. i am not saying that all the
foreigners now would be buying our properties in no time because now they are
dirt cheap but if they decided to buy a 300k house in kd e.g., they don’t have to go thorough the headache that i went through and pledged slavery to the banks to buy one. and there goes another dream property of somebody who had been waiting to get one just to make sure that they earn enough money to get one.
but of course, to let our currency rise unchecked would not
be economically wise with regards our exporters competitiveness etc. so the
gomen needs to do the balancing act. but in the mean time, please do not let me
do away from my dream of staying in a spacious semi-dees or bungalow or for my children and grandchildren’s dream in the future to own a landed property somewhere especially in the klang valley area. it is high enough as it is
already and we definitely do not need another catalyst to raise it even
further out of our own reach. or do we have to be content with the fact that the generation of our fathers and bosses could afford to buy bungalow houses and now we have to be content with linked houses whereas our children and grandchildren shouldn't even dream of buying landed properties?
Posts
No comments:
Post a Comment