With Chinese buyers shying away, new buyers are taking advantage in the project

By FARA AISYAH / Pic By BLOOMBERG

Buyers from Middle East, Indonesia, Singapore and India are snapping the properties in the controversial Forest City project, filling the void left by Chinese citizens who had dominated the multi-billion high-end property enclave.

The project, which is developed by Chinese property developer Country Garden, was the heaven for buyers from China, accounting for almost 80% of the purchasers at one point.

But Beijing’s decision to curb capital outflow from the world’s second-largest economy in early 2017, including for property purchases abroad, had left the developer reeling to seek for new buyers for the US$100 billion (RM389 billion) worth development.

With Chinese buyers shying away, new buyers are taking advantage in the project built on four man-made islands overlooking Singapore, with an estimated population of 700,000.

VPC Realtors (JB) Sdn Bhd property consultant Bruce Lee said sales for the Country Garden Pacificview Sdn Bhd’s project have started to pick up in the first quarter of this year (1Q18).

He said prior to the capital control imposed by Beijing, buyers from China accounted for 80% of the purchases, while the balance of 20% came from other countries.

“There are still buyers from China for the Forest City units, but the percentage has dropped to about 55%.

“The balance 45% of the buyers comprise Singaporeans and Indonesians, account- ing for a total of 25%, followed by the Middle East, India and other Asean countries at 10%,” Lee told The Malaysian Reserve.

Lee said buyers from East Asian countries like Hong Kong, Taiwan and South Korea account for about 5% of the sales, while the remaining 5% are from Europe.

Worries have heightened that the project will not be able to find buyers following the capital flight crackdown.

In early 2017, Beijing — which is trying to restrict capital outflow to shore up its depleting foreign reserve and to stem a further slide on the yuan — slapped a ban on overseas property purchases.

The developer had also shut down its showroom in mainland China as it sought to find new buyers for the project built on 14km of reclaimed land.

Lee said the improvement in sales for the 1Q18 was aided by the affordability for foreigners and the benefits from the Malaysia My Second Home (MM2H) programme.

The MM2H programme was introduced in 2002 to attract foreigners to come and stay in Malaysia, especially those who have already retired or want to conduct business in the country.

From January to August 2017, China’s citizens dominated the MM2H programme with 1,439 approved applications, or 46.7% of the total foreigners allowed to stay in this country.

South Korea came in second with 278 applicants (9%), Bangladesh with 253 (8.2%), Japan 179 (5.8%), Hong Kong 151 (4.9%), the UK and Northern Ireland 113 (3.7%), Taiwan 80 (2.6%), Australia 66 (2.1%) and Singapore 60 (1.9%).

The US had 55 approved applicants, while the remaining 410, or 13.3%, were from other countries.