Malaysia is the latest South-East Asian country to take action to limit ex pats buying property as outsiders snap up bargains and push up the price of homes.
The government already imposes a minimum RM500,000 (£100,000) price bar on non-residents, but plans to double the level up to RM1 million (around £200,000).
The hike is in response to protests from families and young first-time buyers who claim overseas buyers have flooded the market and squeezed them out of buying a reasonably priced home.
Singapore is already clamping down on foreigners by scrapping the fast track Financial Investor Scheme residency scheme that offered ex pats the chance to buy a home for up to £1 million.
The first place in Malaysia ex pats are likely to feel the bite on house prices is the new city of Iskandar – a development three times larger than neighbouring Singapore with 5 million inhabitants with a glitzy new financial centre, university, private schools, luxury homes and state-of-the-art leisure facilities like Legoland.
The government is testing the higher price band for overseas home buyers by setting the minimum at RM800,000.
Many real estate agents are doubtful the government will impose a higher property charge on non-nationals as Malaysia’s property market performance varies across different states, and some might not favour a ban on ex pats buying cheaper properties.
Home values in the capital, Kuala Lumpar, soared by 13% last year as the country’s banks are still willing to lend – like the UK property boom before the credit crisis, easy credit is fuelling property investment, which is in turn pushing up prices.
The fear is this is a bubble driven by speculation rather than demand that will burst sooner or later.
The government hopes that putting a brake on non-Malaysian buyers will slow down prices to allow families to buy their own homes.
Malaysia is a popular ex pat destination as nearby Singapore may be a desirable place to live, but a sky high cost of living is pushing the city to the top of the list of most expensive places to live in the world.
