PETALING JAYA: The real estate slump and mortgage boycott in China will not worsen the Malaysian property market, Rahim and Co International Property Consultants CEO (Real Estate Agency) Siva Shanker said.

 

If the Malaysian property market suffered, he added, it would be due to the country’s own problems rather than the downturn in China’s real estate.

 

“Malaysia needs to look inwards as to how we deal with all these other issues such as the ‘super inflation’ and the complications arising out of the Russia-Ukraine war, instead of focusing just on what is brewing in China,” he told FMT.

 

On July 15, Bloomberg reported that China’s real estate slump, which began in 2021 with curbs on mortgages and funding for property developers, would damage the Chinese economy, and effects would be felt by the rest of the world.

 

Siva said Malaysia already had an oversupply of residential and commercial properties, compounded by other factors such as interest rate increases and the Covid-19 pandemic.

 

He also alluded to the China-backed Johor mega project Forest City, sales of which slowed down when the pandemic hit, resulting in a handover of keys for only 20,000 residential units out of the targeted 700,000 as of March.

 

Siva said Putrajaya would need to keep an ear on the ground should things take a turn for the worse, adding that “if China sneezes, Malaysia will also catch a cold”.

 

Real estate veteran Ernest Cheong told FMT that only those projects funded by Chinese investors would grapple with completion problems as China tightened its purse strings.

 

However, other government-backed projects in Malaysia carried out by Chinese companies would go on so long as the government continued to fund them, he said.

 

Economist Barjoyai Bardai of Universiti Tun Abdul Razak said China’s problem might affect luxury home sales in Malaysia as foreigners were only allowed to purchase properties valued over RM1 million.