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Forest City submerged/ Singkies in Johor drowning

In China, Malaysia, Property on 06/04/2017 at 10:51 am

Yesterday, the South China Morning Post reported that the Country Garden, the Hong Kong-listed developer behind Forest City, would refund payments on its Johor Forest City project to mainland Chinese buyers hit by a crackdown on capital controls.

Zhu Jianmin, vice-president of the Chinese developer told that investors who had made down payments but were now unable to make further payments could cancel their transactions without paying a forfeit fee. The Hong Kong-listed developer stopped sales of the Malaysian project in China amid tightening capital controls, imposed as Beijing seeks to curb outflows and limit downward pressure on the renminbi.

This 2016 article https://www.bloomberg.com/news/features/2016-11-21/-100-billion-chinese-made-city-near-singapore-scares-the-hell-out-of-everybody tells how hard Forest City was being sold to the PRCs.

For those Singkies investing in Johor and M’sia good luck:

“I am very concerned because the market is joined at the hip, if Johor goes down, the rest of Malaysia would follow,” said Shanker, at Axis-REIT Managers, who estimates that about half the units in Iskandar may remain empty. “If the developers stop building today, I think it would take 10 years for the condos to fill up the current supply. But they won’t stop.”

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  1. PAPies will say too bad, you went in with your eyes big big. Should buy HDB, $0 after 99 years still OK lah …. every month open HDB statement feel very happy. Plus rental yield on current HDB resale prices still can get 5+ to 6+%. (I’m getting 20% rental yield on my HDB based on original purchase price) Where got private property give such good rental yield?!?! Even if go for certain REITs paying 8+% distributions, be prepared for rights issues & dilution.

  2. the last time I was anywhere in johor or m’sia was about 19 years ago.

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