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KUALA LUMPUR, Dec 1 — It is alright for Putrajaya to welcome property developers from China, but incentives should be given to local developers too, the Real Estate and Housing Developers’ Association Malaysia (Rehda) said today.
Rehda president Datuk Seri Fateh Iskandar Mohamed Mansor noted Malaysia is an open market and the reality that China is the “big boy” that is pouring in investment worth billions of US dollars into the region.
“Yes, you want foreign investment, there’s no two ways about it. If you don’t take it, our neighbours will take it.
“Let’s be honest, everybody needs foreign investment, but it’s really a delicate balance and I hope the government will be fair, will have level playing field.
“And if you are to give incentives to the foreigners, please, we Malaysians should get the incentives first,” he said at the 2017 Property Outlook Forum, here organised by real estate portal PropertyGuru.
“It’s not right to get a foreign contractor or developer to come and you give that person or that company incentives: tax rebates, no tax for five years or pioneer status. We Malaysians are the ones paying tax from day one, so please be fair to us,” he said earlier.
Property consultant Prem Kumar similarly noted Malaysia’s desire for foreign investment even as he acknowledged possible local concern over the large scale and volume of construction in Malaysia by China’s developers.
He cited Johor’s capital city Johor Baru as a classic example of the influx of developers from China, who he said build thousands of units at one go and have their own market of buyers that may be drawn from China.
“I will not be totally worried about Chinese developers coming into the market. It does create some kind of knee-jerk action and people get a bit concerned: ‘Why are we allowing developers from China to come and compete with our own developers?’
“The obvious answer is it’s an open market,” the executive director of property consultancy Jones Lang Wootton said at the same forum.
The crucial thing is for the Malaysian government to ensure a level playing field and have a more in-depth approach to prevent local developers from being “short-changed” if the country’s trend of allowing the entry of more foreign developers continues, he said.
Fateh Iskandar also highlighted Johor, which he said traditionally had a supply of around 7,000 to 8,000 units annually before the entry of Chinese developers, but last year saw 39,000 new units being released into the market there.
While saying that this was “good” as the sales figure was high with buyers from China snapping up the new units, he also cautioned however that the level of confidence in the property market might be affected in the future with a perceived oversupply when the units are completed but appear unoccupied.
According to a November 21 news report by Bloomberg on Chinese developers in Johor, Chinese firm Country Garden said it had already sold around 8,000 apartments in its ongoing Forest City project there.
The report said Country Garden has also sold all 9,539 apartments in its Danga Bay project in Johor, with Chinese firms Greenland Group and Guangzhou R&F Properties Co to also carry out construction there.
Other panellists at the forum were Khazanah Research Institute’s managing director Datuk Charon Mokhzani, Smart Financing CEO Gary Chua and property lawyer Chris Tan.