The recent change in the rules is causing many interested applicants to put on hold their plans
by S BIRRUNTHA / pic by MUHD AMIN NAHARUL
THE Malaysia My Second Home (MM2H) programme is expected to benefit from the reopening of international borders. However, stricter rules imposed on new MM2H applicants continues to be a risk.
CCO & Associates (KL) Sdn Bhd ED Chan Wai Seen said the reopening of the border is crucial for certain property sectors, namely the hospitality sector and retail property sector in Johor Baru.
Read more: Malaysia approves 15 new MM2H participants
“It is important to note that the current MM2H programme is at the bottom of the cycle. So, the only way is up, going forward.
“However, we believe that many interested applicants may put on hold their plans due to the recent change in the rules,” he told The Malaysian Reserve (TMR).
He noted that the stricter conditions set for new MM2H applications may deter foreigners from wanting to take part in the programme.
According to Chan, traditionally, many businesses in Johor Baru have been depending on patronages by the Singaporeans and many of them have been suffering while waiting for the border to reopen.
Therefore, he believes that there will be an uptick in foreign property buyers particularly from Singapore.
“The demand will improve when things have settled down. Developers may start to activate their marketing plans to sell properties to the Singaporeans,” he said.
Previously, industry players have pointed out that the new rules for MM2H have resulted in a much-reduced flow of applicants with the detrimental impact on the property market, the economy and
the country’s international image. They also urged the government to revive the MM2H programme to ensure that the initiative would
achieve its original objectives. Meanwhile, Centre for Market Education CEO Dr Carmelo Ferlito said it is too early to say whether the MM2H programme will benefit from the reopening of borders.
He noted that it will depend very much on the evolution of the political and economic scenario in the country. “I think with the current conditions which are more stringent than before, we can consider the MM2H as a dead programme” he told TMR. He noted that the costs and procedures continue to make Malaysia a poorly attractive destination for visitors.
“Therefore, I would tend not to see the borders ‘reopening’ (if you want to call it that) as an automatic spur for the property market or the MM2H initiative,” he said.
Juwai IQI Holdings group co-founder and CEO Kashif Ansari said he expects an increase in Singapore-Malaysia cross-border property investment of at least 40% in 2022, underpinned by the reopening of borders.
He highlighted that this investment should continue to climb in 2023, probably reaching pre-pandemic levels that year.
“In 2022, we expect both Malaysian expats living in Singapore and Singapore nationals to increase their property acquisitions in Malaysia, especially in Johor and secondarily in Kuala Lumpur,” he said in a recent statement.
Kashif also claimed that buyers in Singapore are seeking alternatives to the extremely expensive property in their own market.
Therefore, he said the reopening of Malaysia’s borders, the strong Singapore dollar versus the Malaysian ringgit and relatively stable prices of Malaysian real estate are among the factors that will drive property acquisitions in Malaysia.
In January this year, Home Minister Datuk Seri Hamzah Zainuddin expressed confidence that the stricter conditions for the MM2H programme will not deter applicants.
He noted that the ministry had already received 111 applications since November 2021, with 15 already approved.
Judging from the response, Hamzah said it was likely that at least 1,000 people would apply for the programme this year, similar to previous years.
He also believed the MM2H programme would receive the same response this year, as it had received in previous years.
Back in August 2021, the government announced new conditions for the MM2H programme, including the requirement for applicants to have permanent savings of at least RM1 million and a declaration of liquid assets of at least RM1.5 million.
Previously, they only needed to have savings of between RM300,000 and RM500,000.
An MM2H applicant must now also have an offshore income of at least RM40,000 a month, up from RM10,000 per month.
According to data from MM2H Consultants Association, the programme contributed RM38.17 billion to the economy between 2002 and 2019.