Bridging the missing link

Bridging the missing link

PROPERTY ROUNDTABLE
By ANGIE NG

Tapping the vast international real estate market has the potential to lift Malaysia's property sector to a much higher profile. Both the public and private sectors should put their best foot forward to make the country a world-class property haven.

IT is time for Malaysia to tap the huge foreign real estate investor market to spur the property sector and promote the country as an international property investment destination.

While the various measures and incentives introduced by the Government since last December have injected a new vibrancy and enthusiasm among industry players, the foreign factor seems to be the missing link that will turn the wheel of fortune for the property sector.

Malaysia's real estate remains one of the cheapest in the region and there are many exciting products that have sprouted up to cater to international buyers.

These include the many luxury condominium projects and high-end residences in the Kuala Lumpur City Centre vicinity, Mont'Kiara, Sri Hartamas, Bangsar and Damansara Heights.

The Government is aware of the need to attract greater foreign interest to the country and the liberalisation of foreign ownership for properties priced above RM250,000 last December is to shore up foreign buying interest.

The exemption of real property gains tax (RPGT) on April 1 has further raised Malaysia's competitiveness as a real estate hub.

Hot on the heels of these positive measures are the initiatives by the Prime Minister and Housing and Local Government Minister on April 13 to further improve the delivery system of local authorities and launch the property sector into a new era of competitiveness and efficiency.

Chief executive officers of property companies who took part in The Star Property Roundtable last Friday to deliberate on the new public delivery system are eager to see the roll out and smooth implementation of the new initiatives to further enhance the sector's vibrancy.


The panellists at The Star Property Roundtable on the new public delivery system are (from left): Ng Seing Liong, Tengku Abdul Aziz Tengku Mahmud, Datuk C. K. Wong, Tan Sri Liew Kee Sin, Bandar Utama Group director Datuk Teo Chiang Kok and Fiabci Malaysia president Datuk Richard Fong.
They said a streamlined and efficient public delivery system would serve as solid ground for a vibrant and efficient property sector as the speedy approval process would translate into speed to market projects, reduce holding cost and lower the cost of doing business.

According to Real Estate and Housing Developers Association (Rehda) president Ng Seing Liong, a complete mindset change was necessary from the public and private sectors to bring about faster implementation success of the new public delivery system.

Echoing his view, Fiabci Malaysia president Datuk Richard Fong called on the civil servants “to rise above the occasion” and work closely with property developers to iron out any hiccups that might crop up at the implementation stage.

On the much-touted build-then-sell system being encouraged by the Government, Guthrie Property Development Holding Bhd chief executive officer Tengku Abdul Aziz Tengku Mahmud said to ensure the success the system, it was necessary for financial institutions to provide bridging loans to developers as they have to finance the project construction cost until completion.

For Malaysia to achieve its ambition as a real estate hub, the developers concurred that it was necessary to undertake holistic promotion programmes to raise its profile as an international real estate destination.

According to Sunway City Bhd senior managing director Datuk C. K. Wong, the property sector, together with the relevant government ministries, must immediately promote Malaysia as an international property investment destination.

“If effectively promoted, well-heeled and rich foreign investors would include Malaysia as a “must see” location for their investments.

“The international promotions and road shows could cover countries like Singapore, Indonesia, Hong Kong, India, China, Taiwan, the Middle East, Australia, Europe, the US, Canada and South America.”

Wong said Malaysia had all the attributes to attract a bigger foreign presence, including political stability and security, transparent laws and good upside potential in property prices.

“It is now time to package all our attributes and market it to the rest of the world.

“Foreigners are keen to buy our high-medium and high-end luxury apartments. They have started to show interest in the local market after the relaxation of the Foreign Investment Committee rules and exemption of the RPGT,” he added.

The onus is on developers to build international standard and high quality products to entice foreign buyers.

To promote a more robust property market, Bandar Utama Group director Datuk Teo Chiang Kok said a holistic approach to attract the inflow of high net worth investors would boost the value of local properties.

SP Setia Bhd group managing director Tan Sri Liew Kee Sin said concerted efforts by industry players under the auspices of Rehda and Fiabci to market Malaysia as an international property destination would work better than the ad-hoc initiatives by developers currently.

He said the initiatives would also be most timely to spur the development of the Iskandar Development Region (IDR), which has been designated the country's new growth corridor to attract foreign investors.

The IDR is a 2,217 sq km special economic zone in south Johor that aims to transform the state into an economic dynamo.

According to its comprehensive development plan, the IDR aims to attract foreign direct investments to the tune of US$40bil in the first seven years and will create 817,500 jobs until the year 2025.