Malaysia to Ban Foreigners From Buying Homes in $100 Billion Forest City Project

The Malaysian government has confirmed to Caixin that Prime Minister Mahathir Mohamad will ban foreigners from buying residential units in the country’s $100 billion Forest City project — a move that targets wealthy Chinese homebuyers.

The Prime Minister’s Office said Mahathir made the remarks during a news conference in the nation’s capital, Kuala Lumpur, earlier that day.

Mahathir’s comments contradict those of Country Garden Holdings Co. Ltd., developer of the sprawling project in the southern peninsular state that borders Singapore. Country Garden had told Caixin that such reports “are inaccurate.”

“One thing is certain, that city that is going to be built cannot be sold to foreigners,” Reuters quoted Mahathir as saying at noon Monday.

“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.”

A handful of China-related projects have come under scrutiny after Mahathir, 93, scored a surprise win in May, reclaiming the office he originally held from 1981 to 2003. He said hours after the win that he would renegotiate such deals with China, which he said had unfair terms, dragged the country into more debt, and would bring in an influx of immigrants.

During his state visit to China last week, Mahathir reiterated his stance on the Forest City project to Caixin in an exclusive interview.

“That particular project is a very high-value project, and it’s not meant for Malaysians; Malaysians cannot afford (it), especially the indigenous people. So these developments are to bring foreigners to stay there, but no country wants foreigners to come and stay in the country permanently,” he said.

“We are a small country. If a lot of foreigners come in, then we lose control of our country. That is why we don’t approve of that project. We will not allow foreigners to come and live in Malaysia. They can come on holiday. That’s fine. But to live in Malaysia, it is not something that we would welcome,” the leader said.

Reuters reported that Malaysians living in Johor state complained of large numbers of Chinese people snapping up properties in Forest City. They also cited concerns about environmental damage, a glut in the property market, and the impact of land reclamation on fisheries.

Country Garden has developed just a fraction of the planned reclamation of 30 square kilometers (11.6 miles) of Forest City, which plans call to house 700,000 people.

An inside source told Caixin that Chinese nationals still form the majority of group viewers at the project site, despite Country Garden claiming it has diversified target buyers beyond China.

Contact reporter Jason Tan (jasontan@caixin.com)