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Johor’s New Special Financial Zone Designation Comes to Forest City’s Rescue

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The plan, which involves not only designating the development a Special Financial Zone, but housing Singaporean residents there, as well, aligns remarkably with our own analysis from several months ago.

Earlier this year, we published an article about the attractive possibility of making Johor – or at least a small part of it – a special residential zone for certain eligible Singaporeans. Regular readers may recall the article we published back in May about this.

The logic of this was apparent when our CEO, Andy Davison, saw his daughter’s skyrocketing rent costs in Singapore and read about the staggering 60% special tax on foreigners wishing to buy property in that country. Rentals in Singapore have increased by around 50% in the last couple of years, placing a huge burden on many expats who, increasingly, are reportedly finding the cost of living in Singapore very stressful.

By contrast, Malaysia has significant property ‘overhang,’ a word used to describe the gap between supply and demand, and with a lot of unsold properties, most developers are desperately seeking more buyers. Johor accounts for a notably outsize percentage of the country’s overhang.

Moreover, the changes to the MM2H programme contributed to the loss of many buyers throughout Malaysia. Even though MM2Hers seldom buy properties ‘off the plan,’ they do purchase existing properties from homeowners, in turn allowing these Malaysians to buy properties on new developments.

All this led to an idea, which was described by our CEO in his May 2023 opinion piece.

Even before the pandemic crushed the market in 2020, Johor Bahru was leading the pack in Malaysia with property overhang | Image Credit: Mudah.my

The proposal of housing Singaporean residents in Johor’s shiny new development would be a win-win, bringing material benefits to both countries. Malaysia would be able to fill some of its existing empty properties and Singapore could avoid companies relocating elsewhere because of the soaring cost of living. Recent surveys in that country have made clear that this is a real possibility. Despite proposing this idea to a few people, we received no response. This has often been the case in recent years as the various governments that have assumed often tenuous power in the last few years seem less interested in feedback from expats.

Ironically, this is in contrast to the time when Barisan Nasional was in power, and Najib Razak was Prime Minister. Despite the obvious issues surrounding his tenure, his government was often quite receptive to feedback and suggestions that benefitted the country.

We were therefore most interested to read the recent news reporting Prime Minister Anwar Ibrahim’s announcement that he will designate Forest City, the problem-plagued and virtually abandoned US$100 billion mega-development in Johor, as a ‘special financial zone.’ (The featured image for this article is an actual photo from May 2022, so you can see the scale of both the development and the general abandonment.)

PM Anwar Ibrahim announcing the plan to turn the troubled Forest City development into a Special Financial Zone | Image Credit: The Star

Apart from giving workers living there a special tax rate, Anwar has proposed giving Singapore residents a special visa to live there and a priority lane to cross the border. This is very much in line with our suggestion.

It would need some solid marketing support, naturally, but with that, and if the visa is easy to obtain with realistic terms and conditions, it could prove highly beneficial to Malaysia. It would take a while to complete the full package – the visa, the immigration fast lane, and marketing the idea – but it does make a lot of sense. It is also relevant that since both countries benefit from the proposal, it should be that much easier to implement. A comparison is the ease with which you are now able to drive from one country to another in Europe versus before the European Union when it could take hours.


Perhaps the government will also decide our idea to attract multinational headquarters to relocate from Singapore to Kuala Lumpur also makes sense. We will have to wait and see!

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