PUTRAJAYA — The Malaysian government will again review the Johor government's policy on the 70 per cent quota for foreigners owning properties in Forest City, a mega residential development project in Johor close to the Singapore border, and a tighter restriction is foreseeable, said a minister.

Malaysian Housing and Local Government Minister Zuraida Kamaruddin said the review was to ensure locals would not be sidelined from buying homes there.

While a tighter restriction on the number of foreign buyers allowed at Forest City has not been decided, it is the most foreseeable measure at the moment, she added.

"It is still premature to say so, but I think the direction (of the discussion) should be headed that way," she said at a press conference after a ministry meeting in Putrajaya on Thursday (Sept 6).

"For now, our focus is on Forest City and the state government's policy that allows ownership to foreigners of up to 70 per cent. We have to study this issue.

"This is an issue that we have to review to ensure local participation and benefits were not sidelined so locals, especially Johoreans, can enjoy the sophisticated facilities available,"

The US$100 billion (S$134 billion) real estate project came under renewed spotlight last week when Prime Minister Mahathir Mohamad announced that Malaysia will not allow foreigners to buy residential units there.

"One thing is certain, that city that is going to be built cannot be sold to foreigners," the premier said at a news conference.

"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, Tun 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, the developer 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".

Subsequently, Ms Zuraida said she will set up a committee to review the mega project.

Two days ago, Dr Mahathir said foreigners could buy properties in the area, but the government would not provide them with a visa.

Ms Zuraida on Thursday said there is no policy that states that foreigners can obtain a Malaysian visa by purchasing the property.

There is, however, a Malaysia My Second Home programme, which allows qualified foreigners to live in Malaysia for as long as they want through a social visit pass.

Ms Zuraida said her ministry has requested that the Home Ministry be strict with its approvals with regards to this programme.

"Visas and the Malaysia My Second Home programme comes under the Home Ministry. We have requested that it tightens approvals for Malaysia My Second Home applications, as well as visa applications," she said.

The purchase of property is not a prerequisite for foreigners to be qualified under the programme, and those who apply are allowed to purchase property according to a minimum price set by each state.

Foreigners who enter the programme in Johor can only purchase property worth at least RM1 million (S$332,000). AGENCIES