Bulk Buying Ban On Investors To Cool Housing Market

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Wealthy Malaysians are more likely to invest in overseas property than other affluent Asia-Pacific buyers.

A new report from HSBC bank revealed 55% of Malaysians own a property in another country compared to 45% from China and 44% from Hong Kong.

And at least a third of Malaysians own a property in neighbouring Singapore.

Australia was the next most favoured investment spot; where a quarter own a property, followed by Britain, where 14% have invested.

The most favoured overseas property destinations for wealthy Asians are Britain and the US.

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Meanwhile, the key reason driving Malaysians to look overseas to invest in property is tight regulation of the housing market in Malaysia.

House price bubble fears

The government fears a housing price bubble driven by speculation and has repeatedly stepped in to raise capital gains tax, restrict mortgages and regulate house building in a bid to take the heat out of the market.

The HSBC survey suggests although this may be working in Malaysia, investors are simply displaced to other markets where they also drive up prices.

The next proposal from the government is to ration property sales by banning builders from selling more than four properties to a single investor without permission.

The Ministry of Urban Wellbeing, Housing and Local Government is drafting guidelines which are planned to take effect from March 2014.

The idea is to stop wealthy investors and property clubs from negotiating bulk purchases for investors.

Property speculators

“Property speculators and investors are not breaking any laws, but their activities are undermining the housing market and leading to fluctuating prices and a shortage of homes for ordinary buyers who need somewhere to live,” said a government spokesman.

“We want to see a healthy housing market where demand matches supply and prices rise or fall as a result rather than the current market which is driven by speculation that prices will keep rising.”

Before releasing details of the curb on bulk property sales, the government is discussing the proposal with house builders and real estate professionals.

“One of our plans is to collate a comprehensive database of home owners and buyers so we can identify individuals or organisations that are bulk buying,” said the spokesman.

Property prices in Malaysia jumped by 12% in 2012 and were rising fast last year, but are reportedly cooling thanks to the government restrictions.

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