Minimum purchase price for Malaysian properties may increase

Foreign ownership of properties in Malaysia have been out of the news for awhile. And as popularity of homes in Iskandar Malaysia has risen, especially amongst Singaporean investors, the Malaysia government may be considering raising the entry price bar for foreigners, in turn making it easier for Malaysians to own property.

KL Kepong PropertyAs the ringgit continues to weaken, the Malaysian government may increase the minimum purchase price for foreign buyers of Malaysia properties. The move may not affect foreign buyers as much since the currency exchange rates still favour them for now. The Housing Minister Noh Omar says the motivation behind the possible policy change is to give Malaysias more options and availability when it comes to property ownership.

The minimum purchase price for foreign property buyers has been raised twice in the last 20 years and currently stands at RM1 million (S$318,000). State governments are however allowed to set their own limits. The Penang state government has for example set their minimum purchase price at RM800,000. The government is in discussion on the 2 options in which the policies can be adjusted – 1) to raise the floor price of RM1 million per property or 2) to set the minimum purchase price in US dollars for all foreign buyers.

But before the new policies are implemented, will there be increased fervency for Malaysian properties, especially in states popular with foreign buyers such as Penang, Malacca, Kuala lumpur and the Iskandar Malaysia region?