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By Steve Binge

New Investment Laws for Foreigners Should Have 'Little Impact' in Malaysia

The Malaysian property market should be largely unaffected by the new laws brought in to restrict the types of homes that foreign investors can purchase, an expert in the field has claimed. Since the start of the year, the Malaysian government has been looking to bring in a raft of new laws designed to protect the market. The latest, which puts a minimum price limit on the properties that overseas buyers can purchase, is designed to make sure that the cheaper properties in the nation are available for Malaysian people to purchase at an affordable price point.

Under this restriction, foreign buyers will not be allowed to purchase any house that has a floor price of lower than MYR 1 million (£183,152). It will come into effect from May 1st this year, but it is not expected to cool the number of buyers coming from other nations, so should have no negative follow-on for the property sector as a whole. Loo Kong Hoe of Rahim & Co (Johor), said that the vast majority of people coming from overseas to buy homes in Malaysia are already spending in excess of this minimum anyway.

This is in contrast to the average Malaysian national, who will typically invest just MYR 350,000 when they are buying a property. This is the main reason behind the new law, with the government wanting to make sure that Malaysians themselves are not priced out of the market by foreigners snapping up the properties that they can actually afford to purchase.

There are also fears that the number of new homes being built at a cost over this threshold in Malaysia will cause an oversupply of property moving forward, but MIEA Siva Shanker said: "In the second half following this period of consolidation, people will come to terms with the market, so 2015 will see an upturn in the property sector, which will continue into 2016. Even in the medium term, much of the oversupply will sort itself out.

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