Business

M'sia freezes luxury property projects to address glut

KUALA LUMPUR The Malaysian government has frozen approvals for luxury property developments indefinitely from Nov 1 to control the national oversupply of houses and prevent it from adversely affecting the economy.

Second Finance Minister Johari Abdul Ghani said yesterday that the cabinet decided this after scrutinising a detailed central bank report published in June on the real estate glut, reported The New Straits Times.

"The Bank Negara report takes into account high-rise condominiums, shopping malls and commercial units, including those that are worth more than RM1 million (S$325,745)," he said after an event in Kuala Lumpur.

As a result, the minister explained, the Cabinet decided to temporarily stop developments of shopping malls, commercial complexes and condominiums that sold their units above RM1 million.

"This will be temporary until we can clear all the excess supply.

"There is a stark imbalance between supply and demand and we have to review the strategy in real estate development as we do not want such a situation to adversely affect the economy."

This will be temporary until we can clear all the excess supply. Second Finance Minister Johari Abdul Ghani

According to the newspaper, the minister said the government would continue to drive the development of affordable homes, specifically those priced below RM300,000 a unit.

"In this sector, there is a disparity between the 48 per cent demand for affordable homes and the supply that meets only 28 per cent of that. This is the area that needs to be addressed swiftly," he said.Meanwhile, the Johor government said it is looking at ways to relax regulations on foreign ownership of homes in an effort to reduce the glut of unsold properties in the state, reported The Star.

Housing and Local Government committee chairman Md Jais Sarday said that under existing rules, foreigners could purchase only properties that are priced over RM1 million.

"Maybe, we can look at relaxing the requirements based on the size of the houses, allowing them to purchase homes that are more than 1,000 sq ft but less than RM1 million," he said yesterday.

There are more than 120,000 unsold properties in the state. The properties include landed houses, high-rise units and commercial factories. - THE STRAITS TIMES

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