The newly announced Sabah Malaysia My Second Home (SBH-MM2H) programme has generally been well received, but whether it would achieve its objective remains a question mark.
“From the Sabah state government’s perspective, I think the programme makes all sense to them. The programme requirements are not difficult to achieve, but the only question is, how many of these potential foreigners are interested in Sabah as a second home?” said Hongkongers in Malaysia Facebook Group founder and MM2H consultant, Gary Crestejo.
The Sabah authorities announced last week that it has approved in principle the policies for setting up the SBH-MM2H scheme.
Sabah Minister of Tourism, Culture and Environment Datuk Christina Liew said the state cabinet had approved the policies which govern the prerequisites for participation in the programme such as age requirement, medical certification and a fixed deposit account in the state.
Foreigners looking for similar lifestyles to their homes
“Many potential applicants are usually middle-class individuals in developed countries looking to retire in more affordable cities that are slightly similar to their homes but at a slower pace,” said Crestejo.
“For participants from developed countries, West Malaysia is still a closer match over East Malaysia as the lifestyles of cities like Kuala Lumpur and Penang are more similar to their hometowns, which will be easier to adapt,” he added.
Last week, Liew revealed that a fixed deposit of RM200,000, along with a bank account with any bank, were among the conditions for applicants of the SBH-MM2H.
They are also only eligible to buy apartments worth a minimum of RM600,000, she said.
“There must be a minimum stay of 30 days a year and the approved duration for an individual or family is for 5+5 years in Sabah only,” she added.
“People certainly don’t mind locking up fixed deposits or spending a good few weeks’ holiday in East Malaysia annually during their retirement, but they also want flexibility in residing in West Malaysia,” Crestejo added.
“Quality of life and healthcare, frequency of international flights, language, etc are also major considerations for second homes. Although Sabah is a beautiful place to retire, it’s still a unique choice to many.
“As the Sabah government has only outlined the programme very briefly, it’s still too early to judge the programme’s attractiveness,” he said.
State government’s role crucial in ensuring success
On the other hand, Sunway University economist Dr Yeah Kim Leng said the initiative is laudable as it gives Sabah an edge to attract more MM2H applicants, where a greater number of investors and rich retirees will help to boost the economy.
“The property market will be a key beneficiary of stronger demand at the high-end segment while the local economy will be invigorated with stronger spending and investment activities by the successful applicants.”
Yeah said from a decentralisation perspective, “the ability of the state to attract the desired pool of applicants and fulfil its promises to them will unleash state-led efforts to drive the local economy, thereby contributing to the economic dynamism of the country.
“The state government is in a better position to ensure the MM2H is well managed to reap maximum benefits while minimising costs such as overcrowding and demand-pull inflation that may arise from excessive MM2H influx,” Yeah pointed out.
“The less restrictive conditions tailored to the state’s requirements will appeal to those who find the recently revised conditions for the country too stringent,” he added.
State-led effort could trigger national turnaround
Also supporting Sabah’s MM2H effort is Center for Market Education CEO, Carmelo Ferlito.
“I think Sabah’s move is in the right direction. Over the past few years, the federal government has given the impression that foreigners are a threat to national interests, rather than a source of opportunities.
“The behaviour of the federal government is damaging the national economy and favouring neighbouring countries such as Thailand and Indonesia,” he added.
“The emergence of local programmes would bring in a healthy competition which can only benefit Malaysia’s economy, ultimately forcing the national agenda towards rediscovering Malaysia’s vocation towards openness, which has contributed to Malaysia’s success over the past decades, but that has instead been abandoned more recently,” said Ferlito.