Real estate investors could be turned off by the Federal Government’s moratorium on luxury properties costing at least RM1 million, according to Petaling Jaya Utara MP Tony Pua.
“Investors, both domestic and foreign, will tell you that what they fear and hate more than bad policies are inconsistent, uncertain and ad-hoc policy-making.”
“The latter results in constant unanticipated changes and frequent policy U-turns which makes it impossible for business to plan their investments and measure their expected returns,” explained the opposition lawmaker.
This is his response to conflicting statements from government officials after Putrajaya temporarily banned starting on 1 November 2017 all new projects involving upscale homes, shopping malls, and commercial complexes.
Two days after Second Finance Minister Johari Abdul Ghani announced the freeze, Works Minister Datuk Fadillah Yusof claimed that the order will not be implemented across the board, but each proposed development would be assessed on a case-by-case basis.
Johari later clarified that it is indeed a blanket freeze, but it will not impact projects that have already been approved. He added that the authorities will lift it depending on the market situation.
According to Pua, the ministers’ inconsistent statements indicate that the luxury property freeze was hastily imposed and poorly deliberated.
The Federal Government decided to implement the moratorium after Bank Negara Malaysia (BNM) recently reported that the number of unsold homes in the country had reached a record level of 130,690 units in Q1 2017.
This is not only the highest in a decade but exceeds the historical average of 72,729 units per annum between 2004 and 2016. Dwellings costing more than RM250,000 also accounted for 63 percent of these properties.
In addition, Pua questioned if Putrajaya had considered the negative impact of the ban, such as a slowdown in construction activity that could lead to loss of jobs and could negatively affect the economy.
He also pointed out that Federal Government has disallowed the wrong kind of real estate. This is because the central bank said that houses costing over RM250,000 made up most of the unsold properties.
“On the other hand, the latest ban appears to apply to only properties priced above RM1 million. Hence, are we prescribing medication to the wrong patient?”
Meanwhile, the Real Estate and Housing Developers’ Association (REHDA) is urging the government to reconsider the moratorium on new luxury homes, shopping malls, and commercial complexes costing over RM1 million.
To solve the oversupply of such properties, the organisation is suggesting that un-occupied offices and retail spaces should “re-purposed” to properties with strong demand.
Aside from supporting Johari and BNM’s proposal of creating one agency to oversee all housing matters in Malaysia, REHDA is also urging the government to do more to help people buy residential properties.
“The income per capita of Malaysians, in general, has improved by about 46 percent (since 2010) but this is not reflective in the disposable income and purchasing power of the average Malaysians due to the rising cost of living.”
“This is the fundamental reason why many Malaysians cannot afford to purchase property as their high household debt is high. We believe that some measures need to be taken by the powers-that-be to address this serious issue,” it explained.
As such, Putrajaya should consider reducing or removing unnecessary compliance costs on housing projects of property developers so that residential prices can be lowered.
Furthermore, the group is asking for the timely provision of accurate data to guide builders on the number of houses they should construct in a particular place.
“REHDA has always advocated the need for a comprehensive data to establish the demand and supply of properties in the right location. The availability of the data will help give a more accurate picture of where demands are located the most, and which areas require less, thus preventing oversupply.”
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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