The freeze covers developments of shopping malls, commercial complexes and condominiums priced above RM1m

By TMR / Pic By HUSSEIN SHAHARUDDIN

THE government has frozen approvals for the development of luxury commercial and residential properties that are priced above RM1 million, effective Nov 1.

Finance Minister II Datuk Seri Johari Abdul Ghani said the decision was made to mitigate the current imbalance between supply and demand in the luxury property segment.

“The ruling would only involve new submissions,” Johari confirmed with The Malaysian Reserve yesterday.

The decision to freeze approvals for luxury commercial and residential projects was made after the Cabinet scrutinised Bank Negara Malaysia’s (BNM) report published in June on the real estate glut.

The central bank report highlights the situation faced by developers of high-rise condominiums, shopping malls and commercial units, including those worth more than RM1 million.

The freeze covers developments of shopping malls, commercial complexes and condominiums priced above RM1 million and is expected to be temporary until all excess supply is cleared.

Meanwhile, Johor Mentri Besar Datuk Seri Mohamed Khaled Nordin said in a Bernama report that the state government will be studying the causes and factors contributing to a large number of unsold houses in the state.

He said the problem could be initially due to the federal government’s policy in 2015 to limit foreigners to purchase houses priced RM1 million and above.

“Earlier, foreigners could purchase houses priced at RM500,000. But when they were completed, the buyers (foreigners) were trapped by the federal government’s policy.

“But we will also take into consideration what BNM said, as we want to find the causes whether it is due to the distribution system, late approval by the government, or late approval by banks and so on,” he said.

Mohamed Khaled was commenting on a report of BNM’s Quarterly Bulletin in a news portal yesterday, which showed Johor had the largest number of unsold residential properties at 27% compared to Selangor (21%), Kuala Lumpur (14%) and Penang (8%).

He said the state government had long frozen the construction of serviced apartment since 2014, after seeing the impact of unsold units.

However, he said, some developers who had the means, persisted in building this type of houses as they could shoulder the burden of their unsold houses.

Meanwhile, Melaka Chief Minister Datuk Seri Idris Haron said in another Bernama report that property developers and related parties must study and identify customers’ needs and requirements to avoid losses when their property projects have not been fully sold.

Citing an example, he said the state government had taken an initiative by setting the price for affordable housing in the state at not more than RM180,000 per unit for a house with minimum built-up of 1,000 sq ft, three bedrooms and two bathrooms.

“Even though there are developers who were initially angry when I made the proposal to reduce the number of high-end houses in Melaka, I continue to encourage the construction of affordable housing which showed positive impact, with demand over supply on the day of launch,” he told reporters after officiating the state-level “Jelajah Milenia 2017” at Universiti Teknologi Mara.

Some 1,200 participants took part in the event.