Under current rules, foreigners who want to invest in Malaysia's property market have to get approval from the government's Economic Planning Unit for properties valued at 250,000 ringgit and above.

"The new step is aimed at drawing foreign investors to buy residential units in the high-end category and is expected to bring about positive changes to the property and construction sectors," said a statement from the prime minister's office.

"The increase of investments in the property sector by foreign investors will also increase the inflow of foreign currency exchange," it added.

Malaysia has been aggressively seeking greater foreign investment, and Second Finance Minister Nor Mohamed Yakcop said cutting back on bureaucracy for approvals was proof of its commitment.

"We are making it easy for them to buy high-end residential properties and we mean it," he was quoted as saying by the state Bernama news agency.

He said the government was cutting back on red tape to boost the flow of foreign direct investment and revive the ailing property sector, which has been facing a housing glut.

Nor Mohamed also said foreign investors were likely to take up properties at the higher end of the market, at values of between 700,000 to 900,000 ringgit.

The ruling will be effective from Thursday December 21 and will not have any conditions on the usage of the property or the limit of units to be purchased, it said.