SushiFan

A snippet of news in today's newspaper.
https://www.thestar.com.my/news/nati...n-forest-city/

Epicurious

Interesting, but you omitted this part:
Those figures are way out of date, but they do illustrate that the vast majority or property-owning foreigners are not on MM2H.

And I'm surprised that so few of the 40,800 MM2H holders are property owners, around 11%.

RedApe

Well, home purchase is a serious investment, and most MM2H recipients are likely Seniors. If you buy property (vs. renting) what's the cost benefit. The MM2H is not a "permanent visa". Can heirs of that property automatically receive a longterm visa? Let's say you have a spouse that resides in the house/condo...is she able to easily transfer the property and visa into her name? And if one is no longer working committing a tremendous amount of your savings and monthly income to purchase property can be financially difficult. You need that as a fund for living down the road. Retirees usually SELL their home and downsize...they don't go the other direction and take on a new mortgage when they are not working.

A large home is surplus to needs - as one doesn't need a bevy of Bedrooms for young kids, and if one moves to Malaysia one may have jettisoned most non-essential home furnishings and a lifetime of accumulated junk. There's no need for a house, garage, big yard. The big disadvantage of not having a home is that there is not room for pets (substitute kids) and privacy. But one could rent a house if one really needed to. Purchasing a condo doesn't even have those advantages (i.e. yard for that barbecue, privacy, pets).

I think there are serious impediments to home purchase under MM2H...not so much in the obtaining that home...but in what happens when the MM2H primary holder dies.

So it doesn't surprise me at all that so few MM2H holders actually are property owners. I'd bet that those that do, mostly purchased the property before they were 55 years of age, when they had kids. Many were still working, not really retired. Some may rent it out. Some may be on MM2H, but married to a local (thus can easily pass it on) and never got a Married Social Visit Pass for various reasons.

Even more interesting is how few bothered to use their withdrawal capacity from their fixed account to help finance the purchase. Almost no withdrawals were actually made for property/locally-made car purchases...most were for school fees and healthcare. It was a benefit that "wasn't". Or at least one that was not relevant to the needs of most on MM2H. Now if one could get reimbursement for RENT...that would be something!

Epicurious

Whatever the reasons, it's clear that MM2H holders have negligible effect upon house prices in Malaysia, given the low volume of buying compared with non-MM2H foreigners. I can't quite see why higher barriers for the scheme are thought to be necessary?

SushiFan

I did not omit that part. This section of the forum is about retirement and MM2H, which is why I only highlighted the bit about MM2H.

And I am not so surprised about the low 11% percentage. Home ownership in a foreign country, on a temporary visa with unclear prospects of it being extended/renewed, in a overpriced bubble market, results in quite some investment risks. I can very well understand that many MM2H holders are not willing to take such risk.

RedApe

The few people that I know that have purchased property here in Sarawak under their M2H program are at the younger end of the spectrum, or have a young wife. One or two are married locally. There are some non-MM2 expats that run homestays, restaurants and hostels with their local families, one or two that have built a "dream house" near a beach, or that have an experimental farm. Why Chinese, Koreans, Bangladeshis, Iranians on MM2H and such would buy property I have no clue? Maybe the place stays empty, or their kids use it while going to school, or it's a hedge against repression back home- a place they can run to as refuge. People from some countries may weigh risk differently than most of us here on British Expats. Imagine if you are a Christian, Zoroastrian or Jew in Iran, or a Muslim, Catholic or Evangelical in China...or just someone that doesn't like the system and thinks they've said a bit too much at some point in time. Being able to get yourself and family quickly out and established elsewhere might seem to be worth the risk.

...or perhaps something a bit more questionable (buying and then renting to others, running a business out of the property, using it as a base for "China Dolls" that come in as "students").

It's interesting that the Federal Ass't Minister is admitting that they don't have much they can do to prevent the foreign SALES in Forest City, despite the concern it is essentially an "ethnic enclave". I wonder how many of the property owners there are even on the MM2H program and how many just bought the property as "investors"?

eCdD

As I wrote before, Forest City is not really connected to MM2H. The 1 million minimum price rule is not active, and as it is written in the article:

“This is because the multi-billion project comes under the Johor government and is located at the international zone in Gelang Patah. So there’s no restriction on foreign ownership."

About the "only 4,499", I guess they have this figure from the number of people who put out parts of the FD with the property buying. The real figure is much much higher, all Chinese I know immediately bought property after being approved for MM2H.