TODAY
KUALA LUMPUR — Malaysia will not allow foreigners to buy residential units in the US$100 billion (S$134 billion) Forest City project in its southern state of Johor bordering Singapore, Prime Minister Mahathir Mohamad said on Monday (Aug 27).
The project has faced uncertainty since Tun Mahathir's coalition scored a shock victory at the May 9 General Election, as developer Country Garden Holdings looks to revive faltering demand for a city planned to be home to 700,000 people.
"One thing is certain, that city that is going to be built cannot be sold to foreigners," Dr Mahathir told a news conference in Kuala Lumpur.
"We are not going to give visas for people to come and live here," he added. "Our objection is because it was built for foreigners, not built for Malaysians. Most Malaysians are unable to buy those flats."
[So you're just going to let the residences stand vacant? Who exactly are you trying to punish?]
Dr Mahathir didn’t specify how he would put a stop to foreigners buying the property at Forest City or how far-reaching the ban on visa approvals would be.
Forest City has complied with all laws and regulations and has the necessary approvals to sell to foreign purchasers, Country Garden said in a written response to Bloomberg. The company is seeking clarifications with the Prime Minister’s Office regarding the press conference, it said.
Country Garden Chinese buyers now make up about two-thirds of the owners of the Forest City apartments that have been sold so far, with 20 per cent from Malaysia and the rest from 22 other countries including Indonesia, Vietnam and South Korea.
Opposition to the project helped drive Dr Mahathir's election campaign, during which he called it, and other Chinese-backed projects, evidence of his predecessor selling Malaysia to China.
Before the May 9 General Election, Dr Mahathir had claimed that over 700,000 Chinese nationals will be brought into the country through the Forest City project.
He further claimed that the new Chinese immigrants will be granted Malaysian identity cards that would enable them to vote in the next general elections.
His remark back then earned the ire of Johor monarch, Sultan Ibrahim Iskandar, who was reportedly "upset and offended", over what he labelled as baseless fear mongering.
[Look at the broader picture. If I'm not wrong, the Johor Royal family is invested in these developments.
Now here is the politics.
Mahathir wants to review the water agreement with SG.
Johor Royal Family has stated that Johor has sole authority over water rights and treaties. The 1962 agreement was signed between the then-municipality of Singapore and the State of Johor. And the crown prince has told Putrajaya (politely) to butt out (in the case of water agreement with SG).
So how will Mahathir pressure the Johor Sultanate to be amenable to his suggestion to review the water agreement?
This.]
Malaysians living in Johor had also complained of large numbers of Chinese people snapping up properties in Forest City, besides concerns of environmental damage, a glut in the property market, and the impact of land reclamation on fisheries.
The 1,386ha Forest City project encompasses the development of facilities for business, tourism, hotel, residence, services and others, built on four man-made islands in Iskandar Malaysia.
[I have wondered why they had to reclaim land and build on artificial islands. I wonder if in their warped mind, they make a distinction that artificial islands are NOT the original lands of their fathers so it is ok to sell to foreigners - they are technically not on their ancestral lands.]
Work to build more high rise residential towers, town houses and commercial buildings is continuing full steam, with dozens of heavy duty trucks carrying sand and materials while cranes dot a skyline that is growing taller and denser as high-rise apartments rapidly approach completion.
Forest City is barely inhabited, with only a handful of staff living at its service apartments and guests at its hotel.
But earlier this month, an international school opened its doors to the first 60 students - mostly from China and also from South Korea - to its 22-acre campus planted with "vertical gardens," an Olympic-size pool and three yoga studios.
They will be knocking about the Shattuck St Mary's school campus designed to accommodate 1,000 students as construction roars on in the backdrop.
Mr Liang Ri Sheng, 44, who runs an electrical services company in Guangzhou, said he hopes Forest City will be the gateway for his son to an international life, riding on the strength of China's Belt and Road regional infrastructure push.
"It will give both eastern and western exposure for my son. I think it's good for my son's growth and development," Mr Li told Reuters.
His family will be one of the first 482 to get the keys to their new homes by September.
AGENCIES
[Addendum. I thought of posting the following as a separate post, but policies in Malaysia are always flipping. Posting an addendum may be easier to track the story. Anyway, Johor (and Johor's Sultan) has started to push back. Johor has sole right and authority over land and water issues. I am not sure if selling residential development counts as a land issue, but if it is, then Johor could use this as a reason to secede.]
Forest City foreign sale ban not yet decided, says Malaysian minister
28 August, 2018
PUTRAJAYA / JOHOR BARU — Malaysia's Housing and Local Government Minister Zuraida Kamaruddin said on Tuesday (Aug 28) that the prime minister's remarks banning foreigners from buying homes at the Forest City project in Johor has yet to be formalised.
She told the developer, Country Country Holdings, to write to her ministry to clarify Tun Dr Mahathir Mohamad’s announcement on Monday.
“For the time being, it is still undecided if they can sell property to foreigners,” she said. “We must assess (the situation) and then provide the prime minister with a report.”
Ms Zuraida added that any resolution must also involve the Finance Ministry and the Johor government.
Her statement comes after the Johor state government said it will seek further clarification from the Prime Minister's Department.
Expressing his surprise over the remarks, Johor Housing and Rural Development Committee chairman Dzulkefly Ahmad said the move would have "huge implications" on the real estate sector in the southern Malaysian state.
"We are still trying to make sense of this new move as we have yet to be informed," The Star Online quoted him as saying on Tuesday.
By convention, matters related to land and water falls within the purview of the state government but to date, there has been no discussion between the federal government and Johor on the issue, said Mr Dzulkefly.
He also said Johor has instituted several measures to restrict property ownership by foreigners, including a requirement that foreigners can only purchase properties worth RM1 million (S$333,000) and above.
"The previous (state) government also introduced policies to include international zones within the project and other parts of Johor," he said, referring to zones where foreigners are allowed to purchase units.
On Monday, Dr Mahathir announced that Malaysia will not allow foreigners to buy residential units in the US$100 billion (S$134 billion) Forest City development, which is a partnership between Chinese developer Country Garden and the Sultan of Johor.
[So how much of this is pressure and leverage against the Johor Sultanate. Keep pushing and Mahathir may face a secession crisis. Still early yet. But keep pushing his luck.]
"One thing is certain, that city that is going to be built cannot be sold to foreigners," the Malaysian prime minister said at a news conference in Kuala Lumpur.
"We are not going to give visas for people to come and live here," he added. "Our objection is because it was built for foreigners, not built for Malaysians. Most Malaysians are unable to buy those flats."
However, Dr Mahathir didn’t specify how he would put a stop to foreigners buying the property at Forest City or how far-reaching the ban on visa approvals would be.
Hours after the premier's announcement, Country Garden said Dr Mahathir's comments "may have been taken out of context", and pointed to Malaysia's National Land Code, which stipulated that "a foreign citizen, or a foreign company may acquire land in Malaysia subject to the prior approval of the State Authority".
The Forest City project has faced uncertainty since Dr Mahathir's Pakatan Harapan coalition scored a shock victory at the May 9 General Election, as Country Garden looks to revive faltering demand for a city planned to be home to 700,000 people.
Opposition to the mega project had helped drive Dr Mahathir's election campaign, during which he called it — and other Chinese-backed projects — evidence of his predecessor selling the country to China.
He also claimed that over 700,000 Chinese nationals would be brought into Malaysia through the Forest City project, and that the new Chinese immigrants would be given Malaysian identity cards that would allow them to vote in the next elections.
Built on four man-made islands in Iskandar Malaysia, the 1,386ha project includes facilities for business, tourism, hotel, residences, and other services.
About two-thirds of buyers of the Forest City apartments are from China, with 20 per cent from Malaysia, and the remaining from 22 other countries.
AGENCIES
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