There has been an "unsettling pattern" in the way policy pronouncements are made, the latest being Putrajaya's policy on the Forest City project in Johor, said the Centre for a Better Tomorrow (Cenbet).
The think tank said Prime Minister Dr Mahathir Mohamad's announcement that foreigners will not be allowed to acquire property in Forest City had surprised many, even the Johor government.
"A day later, the Prime Minister’s Office clarified that foreigners are allowed to own property, subject to conditions. Such communication gaps can cause jitters among investors.
"It also raises questions about the federal government's perceived encroachment into land matters, which rightfully should come under the state's jurisdiction," Cenbet said in a statement today.
Other instances of "flip-flopping" include contradictory statements made by government figures on the Kuala Lumpur-Singapore High-Speed Rail (HSR) and East Coast Rail Link (ECRL) projects.
"These multi-billion ringgit projects involve foreign governments and investors. Any major developments would attract international media scrutiny.
"With a new government in Putrajaya, the country needs to allay investors' concerns, not add on to the uncertainty, especially when we need more FDIs in an increasingly competitive economic landscape," Cenbet said.
The think tank urged Putrajaya to be mindful in making future announcements and ensure that there was due process, including prior engagement of stakeholders, to ensure good governance.
The Forest City project is a joint venture between Country Garden Holdings - one of China's biggest real estate firms - and a company linked to the Johor sultan.
It is situated near the Port of Tanjung Pelepas, spanning 1,386-hectares across four man-made islands.
It was marketed as a mixed-use development project and initially aimed towards buyers from China and projected to sustain a population of 700,000 by 2035.
Forest City was launched in 2014 by the Najib Abdul Razak administration, which provided it with duty-free status and offered developers generous tax breaks.
In the run-up to the May 9 general election, Mahathir had repeatedly criticised the project on grounds that it would substantially alter the demographics of Johor and that there should not be a real estate project specifically tailored to foreigners.