JOHOR/MALAYSIA: Chinese investors who bought Malaysian properties are wondering how the surprise win by the opposition coalition in the recent elections will affect their investments.
Mahathir Mohamad, the new Prime Minister of Malaysia, has been a fierce critic of the US$100 billion project in Johor called Forest City, a special economic zone about the size of Hong Kong.
Developed by Hong Kong-listed Chinese firm Country Garden, buyers get free help with applications for the Malaysia My Second Home programme offering foreigners long-stay visas of up to 10 years.
Malaysia-based political commentator Phoon Wing Keong said most existing Chinese-invested projects, including those by China-based developers, would continue unchanged because the new government needed to send a positive signal to businesspeople and foreign investors.
However, Mahathir’s election win is still a source of worry for Chinese investors. The 92-year-old leader said in a Reuters interview that Chinese “coming in here, buying land, developing luxurious towns, is not beneficial for us”.
Forest City is a mixed residential, office and retail development built over 20 years on four artificial islands with a total area of 13.86 sq km.
Many of the investors have been middle-class citizens from China, lured a massive promotional campaign promising an affordable project “near Singapore”.
With flats being sold for just 20,000 yuan (US$3,150) per square metre – a quarter of the rate in Beijing – many Chinese investors did not hesitate to invest.
Last year, Mahathir renewed criticism of the sale of land to foreigners, especially in the Forest City reclamation project.
“Our land will be completely sold, no matter what happens to Forest City,” said Mahathir in December.
“I hope Forest City will truly become a forest … Its residents will consist of baboons, monkeys and so on.
“We should realise that once we sell land to others, we no longer have any ownership over it.”
Country Garden said all of property owners were protected by Malaysia’s property ownership laws, a situation that was not altered by the change in government.
Phoon said all may turn out fine for the Forest City project.
“If the Forest City project was developed under a just, legal and proper agreement with the local government, the property right of the buyers – either from the mainland, or Singapore and other neighbouring counties – would be protected well,” Phoon said.