Malaysia is banning foreign buyers from purchasing homes in a new $100 billion development, the latest in a string of real estate clampdowns across the globe.
Malaysian Prime Minister Mahathir Mohamad on Monday said foreigners would be blocked from buying homes at Forest City – a huge residential complex being built by Chinese developer Country Garden Holdings Co. on a group of artificial islands in the city of Johor, Bloomberg News reported.
Mahathir also said foreigners would not be granted visas to live there.
The project has targeted buyers from mainland China, and Mahathir – who rose to power by tapping into nationalist rhetoric – has called foreign investments that don’t benefit Malaysians “a new version of colonialism.”
Across the globe, countries are putting protectionist measures in place, as low interest rates have made home buying unattainable for many.
“The tension around foreign investment is always going to be much more acute when affordability is getting worse,” Brendan Coates, a researcher at the Grattan Institute think tank in Melbourne, told Bloomberg.
He noted that even when foreign buyers have little impact on housing prices, as they do now on a global basis, they may still be blamed by locals priced out of the market.
New Zealand’s parliament last month approved regulations that prohibit foreigners from buying existing properties. [Bloomberg] — Rich Bockmann