The Malay Mail Online
April 2, 2014
KUALA LUMPUR, April 2 — Growing acrimony in China over Malaysia’s handling of the MH370 crisis could jeopardise Chinese buyers’ appetite for property development here, according to the Wall Street Journal.
The news comes as rancour in Beijing over the Malaysia’s continued inability to find the missing Malaysia Airlines plane that carried 153 Chinese nationals among the 239 people on board has already torpedoed the Visit Malaysia Year 2014 promotions in the country.
Families of the Chinese passengers on the doomed flight and their countrymen became hostile towards Malaysia following its announcement on March 24 that satellite data showed the plane “ended somewhere in the middle of the Indian Ocean”.
The absence of physical evidence of the flight led some families to label the Malaysian government “murderers” for implying that all those aboard were dead.
“For now, marketing homes in Malaysia is going to be a bit awkward. It’s just like how we don’t market homes in Japan to Chinese customers,” an anonymous Beijing-based real estate consultant told the WSJ.
But the expected drop-off will not only hit Malaysian property developers; Chinese real estate firms who invested heavily in the market here could now end up with lots for which they might find fewer buyers.
One such firm was Guangzhou-based Country Garden Holdings, who began venturing into the local property market via Johor Baru in 2012.
Sales in its Country Garden Danga Bay project there last year reached roughly 7 billion yuan (RM3.7 billion), and was the firm’s biggest sales contributor.
“The (MH370) incident has brought some negative impressions of Malaysia (and the) Malaysian government, and we do not preclude the possibility that this would also affect our projects in the Malaysian market,” said Country Garden in a statement.
But it said it was still confident in its investment in Malaysia.
“We believe that Chinese buyers in the choice of overseas investment are rational,” it said.
Malaysia was fast becoming the regional “darling” of property buyers from mainland China following market restrictions in Hong Kong and Singapore.
In 2013, Chinese institutional and retail investors invested a total of US$1.9 billion (RM6.2 billion) into real estate in Malaysia, exceeding the US$867 million invested in Hong Kong and US$1.8 billion invested in Singapore, according to real estate consultancy Savills.
The figure also topped the US$1 billion invested in Australia, but lagged Chinese investments into Britain and the United States.
It is unclear the extent of the damage MH370 will ultimately deal to the property sector in Malaysia, but parallels are being drawn between the missing plane and the China-Japan tension in 2012 that saw buyers in the former country organise concerted boycotts of products from the latter, which hit its automotive sector hard.
Still, analysts believe the effects will not be permanent.
“In the long term, homebuyers will consider more fundamental issues, like education and investment prospects of buying a home in Malaysia,” CIMB Securities analyst Johnson Hu told the US daily.
On Monday, Tourism Minister Datuk Seri Nazri Aziz said that “Visit Malaysia Year” roadshows in China would be halted until the MH370 case is closed.
Nazri yesterday conceded that, less than a month since the plane was lost, the falloff was already taking its toll.
“I would be lying if I said that it is not affected.
“We are sure that the Chinese passengers’ families are angry at Malaysia including some of their artists who expressed the same sentiment,” he was quoted as saying by Sinar Harian.
China currently accounts for 12 per cent of tourist arrivals here, who contribute six per cent of the country’s tourism earnings or approximately RM39 billion last year.
On Sunday, several families of Chinese passengers of MH370 arrived in Kuala Lumpur from Beijing, and held a press conference to denounce Malaysia’s handling of the search for the plane.
Some held aloft banners that read in Chinese and English: “You must return relatives of MH370, no strings attached” and “Hand us the murderer”.
MH370 went missing shortly after departing Kuala Lumpur International Airport for Beijing on March 8 and remains missing despite an international search involving over two dozen countries.