Mahathir now says foreigners can’t live in Forest City

Malaysian PM Mahathir has declared that foreigners will not be granted visas to live in Forest City. Huh what?! In case you don’t know, Forest City is a massive project by Chinese developer Country Garden Holdings Co to create a new city that will eventually house 700,000 people on reclaimed land near Singapore. The whole point of the project was to target foreigners.

In fact, Chinese i.e. PRC 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, South Korea and SINGAPORE.

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This is not the first prata moment by our neighbours – they also want to claw back on our High-Speed Rail agreement (or at least delay it but who knows for sure cos story change every day) and the China-backed US$20 billion East Coast Rail Link project.

Reports noted the statement from the developer of Forest City, saying that “Forest City has complied with all laws and regulations with the necessary approvals to sell to foreign purchasers”. I feel sorry for the developer who must be panicking now, awaiting the angry phone calls and emails from buyers. Deep down inside, they must know that with this government, their investment is now uncertain. Who knows if the government may decide to change the very same laws and regulations that were complied with?

With property investments, overseas investments are particularly risky. You can do all the homework but ultimately you are at the mercy of the authorities who may enact laws to send your investment value spiraling downwards. So please ah, better think twice if you want to invest in property up north. Paying in ringgit may feel shiok now but if your property is devalued, lagi shiok.

In the meantime, both the Johor Housing and Rural Development Committee and Country Garden said they will seek clarification from the Prime Minister’s Office on Dr Mahathir’s comments. Even the Johor authorities kena snooked by Mahathir. For everybody’s sake, hopefully this is just a lot of hot air. Because if contracts and legally binding agreements can be ripped up without a care (ahem water agreement), who in their right mind will trust your word in future?