Some potential buyers holding off Forest City purchases after Mahathir’s remarks, others not concerned

JOHOR — There was an air of caution in Forest City's show-flat in Johor on Tuesday (Aug 28), a day after Malaysian Prime Minister Mahathir Mohamad's comments that he would ban foreigners from buying property in the mega development, but potential buyers were not unduly worried about the impact of the leader's comments on their investments in the country.

It was business as usual in Forest City's show-flat when TODAY visited the US$100 billion (S$134 billion) development on Tuesday, as groups of Chinese tourists were seen in the vicinity, with some talking to property agents decked in yellow polo T-shirts.

While some of the potential buyers said they were reconsidering their investments after hearing Dr Mahathir's comments, others dismissed his remarks and remained optimistic about the project's potential to deliver returns.

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A potential Chinese buyer who only wanted to be known as Ms Li, told TODAY that she had initially considered buying a two-bedroom apartment in Forest City for her 15-year-old daughter if she decided to pursue her studies in Malaysia.

The 35-year-old technician from Henan, China, was among one of a number of tour groups from the central Chinese province that visited the development on Tuesday. Ms Li's group arrived on Monday for a three-day visit in Johor.

She said: "After what Dr Mahathir said, I'm reconsidering. If the Malaysian government does not welcome foreigners, my daughter could find it hard to fit in, or could get ostracised."

She added that she may send her daughter for further studies in Australia instead.

Another prospective buyer, who only wanted to be known as Mr Wang, said he had planned to buy a retirement home there. He was drawn to the development as it is co-run by Chinese developer Country Garden Pacificview, and is located in Malaysia where he can enjoy summer temperatures all year round.

However, he is reconsidering his decision after hearing Dr Mahathir's comments. The 50-year-old, who works in the telecommunications industry in China, said he could not understand why the Malaysian leader made these remarks, particularly as foreigners who buy properties in Forest City would help boost the Malaysian economy.

"I'll be worried about having my money locked up in a property in Malaysia if they are not keen on having foreigners," said Mr Wang.

But there were others who were indifferent to the Malaysian PM's remarks.

Mr Chen Ke, 32, who bought an apartment in Forest City last year, said he was not too worried about future development plans as the Sultan of Johor has been supportive of the mega project.

Noting that Dr Mahathir's remarks could have been made for political reasons, the Chinese national said he would not mind having fewer countrymen as his neighbours as he wanted his children to grow up in a more cosmopolitan environment.

"The whole point of moving from China is for my children to have a different schooling environment," said the father of two children aged six and seven. He has been living at Danga Bay, which is located near the Causeway, after moving from China to Malaysia for his children's education.

Mr Liang Hui, 33, said that relations between China and Malaysia had always been stable, and he did not think it would affect the property too much. He is considering purchasing a unit in Forest City and moving to Malaysia to take advantage of its lower levels of air pollution, and allow his children to study there.

Aside from potential buyers, property agents were also not worried, as an agent who did not want to be named told TODAY that he would "go with the flow as things unfold", and that he was not too concerned about Dr Mahathir's comments.

'HUGE IMPLICATIONS'

On Monday, Dr Mahathir said that Malaysia would not allow foreigners to buy residential units in Forest City, a joint development by Chinese developer Country Garden Pacificview and the Johor state government. He also said that they were not going to "give visas for people to come and live here", adding that the development was built for foreigners, and not Malaysians.

Hours later, Country Garden Pacificview responded by pointing to laws that allow foreigners to purchase land in Malaysia, and the firm said that Dr Mahathir's comments "may have been taken out of context".

The Chinese firm also pointed out that Dr Mahathir had welcomed foreign investment during a meeting with the developer's chairman in Beijing just weeks ago.

Dr Mahathir's comments also triggered differing statements from several Malaysian state and government agencies on Tuesday.

Johor Housing and Rural Development Committee chairman Dzulkefly Ahmad said he was surprised at the PM's remarks, as he said the move would have "huge implications" on the real estate sector in the southern Malaysian state.

Malaysia's Housing and Local Government Minister Zuraida Kamaruddin on Tuesday insisted that Dr Mahathir's comments on banning foreigners from buying Forest City property have  yet to be formalised. Country Garden Pacificview had been told to write in to her ministry to clarify the announcement, she said, and that any resolution must involve the Finance Ministry and the Johor government.

She added that a committee would be formed to study and review "whatever terms that were agreed to previously" for the Forest City project.

The prime minister's office also issued a statement on the same day noting that Malaysia imposes certain conditions on foreigners purchasing property.

"Purchase of properties however, does not guarantee automatic residency in the country... In welcoming foreign investments to Malaysia, the government reiterates that it welcomes foreign direct investment that contributes to the transfer of technology, provides employment for locals and the setting up of industries," added the spokesperson.

Built on four man-made islands in Iskandar, Malaysia, the 1,386ha Forest City development will include facilities for business, tourism, hotel, residences and other services. About two-thirds of buyers of the Forest City apartments are from China, with another 20 per cent from Malaysia and the remaining from 22 countries, including Indonesia, Vietnam and South Korea.