1. All projects in Iskandar that had been approved before the implementation date, developers are allowed to sell below RM1m to foreigners. But does it affect subsale, not too sure of it.
2. Medini does not have this RM1m rule. Medini is 3x Singapore size, so there will be many many condos coming up and all these are approved much earlier. Buying and selling amongst foreigners at any price is not a problem. I suspect the State Government is trying to designate Medini as a international zone for foreigners. That's why this RM1m came in as a indirect policy. There's no fencing but the incentive is free buy and sell within Medini.
3. I think investment strategywise, it is either you buy the best or you don't at all. There's no room for middle players. Niche properties will always have buyers who are prepared to pay high prices. The middle players will have to fight it out among themselves as it is more affordable bothways.
For 1, after the implementation date, developers have no choice right? This will only encourage pricing of new condos to be as high as possible to allow and attract foreigners to buy. That's another shortcoming of the restriction. It artificially inflates pricing. As far as subsale is concerned, it definitely will be affected. Sellers can consider only a restricted group of buyers they can sell to.
For 2, even though there is no RM1mil restriction, I feel the penalty paid by buyers is that all the condos are of leasehold type. Although there is still a lot of lease remaining, the psychology of future buyers may be stronger than any reasoning. For eg, if many buyers are insistent or have the perception that in Malaysia, it is wise to buy only freehold, no matter how a seller convinces them that there is still 90 years lease left in the property, no one will buy it.
Another penalty is the fact that Medini is still very much undeveloped but prices are way overpriced for the properties' worth. We can only see how long they will be sustainable.
Also, I understand that all the incentives that Medini buyers enjoy now (like no RGPT) will last only up to 2025? I'm not sure about this. Got to check it out. But I vaguely recall reading something like this. Which means by then, the authority can impose more restrictions to buyers?
Given so much land available in Medini and no doubt more condos to sprout up in future, I don't think it will be easy for foreign buyers to sell to other new foreign buyers. If I am a new buyer, definitely my first choice is to look at newer properties. I will be spoilt for choices. Why should I buy from subsale? That should be another concern for buyers in Medini. The timeline for development in Medini is usually quoted as 10-15 years. One bank in its report even gave a 15-20 years time frame. That's way too long for me to go in as an investor. Opportunity cost and risks are too high.
For 3, I agree and disagree about only buying the best. I disagree because I feel buying properties should be attractive to a range of buyers. Some can buy cheaper properties, some more high end ones. It all depends on their aim and finances.
What we want is an asset. Whether you use it for your own purpose or buying it solely for investment is another matter. But it generally should not make you lose money along the way. This is the part where I also agree with the need to get the best, as you said.
Now that's where the problem of Iskandar lies. Cos rental and resale are very much an untested market there. Like it or not, whether those smooth-talking salesmen in Malaysian property talks tell you Iskandar property prices will "SURGE" in 10 years time, you have to accept that there will be a huge oversupply of properties coming up.
If you have money to splurge, and you don't even need to think about getting it back, you are probably fine in this whole game. Just buy to enjoy and relax. (Not many are in this category though.)
But rich or not, I always feel when one buys properties, they should make money along the way. If the buyers' money is stuck in the property and difficult to offload when they need to, like what we are seeing now and for many years to come in Iskandar, then to me that's a high risk, negative returns liability.
