Foreign buyers may pay double for houses soon

Foreign buyers may pay double for houses soon

In an effort to control the rise in property prices, the government is mulling to increase the minimum floor prices for houses that may be bought by foreigners, from the current RM500,000 to RM1 million.

Sources said that the move would likely be implemented by the economic planning unit (EPU) under the Prime Minister's Department, currently led by Minister Tan Sri Nor Mohamed Yakcop (pictured).

"From what I understand, these revised guidelines have been discussed at the ministerial level and should this be enforced, it will mean that foreigners will only be allowed to buy properties priced above RM1 million. For now, the base price is set at RM500,000 for foreigners. This base price is a bit low looking at present circumstances," a source noted.

He added that the current trend seen across the property market shows that prices "are still continuing to climb despite measures by Bank Negara to curb property prices from spiralling out of control."

According to another source, these revised guidelines are expected to consider a mildly lower base price threshold of RM800,000 for homes in some economic corridors, like Johor's Iskandar Malaysia, to maintain the success and development of these hotspots.

"This base price will also be subject to reviews by the government from time to time depending on the inflationary situation of the economy and to keep overall inflation in check," added the source.

Recently, Datuk Donald Lim, Deputy Finance Minister, said that the government would take "strict measures" to evade the effects of a US subprime mortgage financial crisis, following the seven percent increase in house prices in Q4 2011, although Bank Negara has already announced measures to control property prices.

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