Still, the govt would consider some exceptions for new project developments in strategic locations
By IZZAT RATNA / Pic By ISMAIL CHE RUS
There is no committed timeline to lift the government’s freeze for luxury commercial and residential projects, said Second Finance Minister Datuk Seri Johari Abdul Ghani.
He said the moratorium for projects priced above RM1 million is also not expected to be lifted in the immediate future, as it would depend on the market to readjust and strike a balance for supply and demand in the sector.
“This freeze is temporary, as once we see the stocks becoming more balanced, only then would we lift the ban,” he told reporters at the signing ceremony between EcoWorld Development Group Bhd and Willmott Dixon Holdings Ltd last Friday.
“The only leeway given is for residential development, but for the high-end and office segments, it remains as a full-stop order.
“We do not want to see developers coming out with properties at the fringe of Kuala Lumpur (KL) and Selangor priced above RM2 million, where there is no demand present,” he said.
Johari also stressed that the Finance Ministry would not entertain bailouts for any companies that are facing challenges and financial constraints in clearing out their existing stocks, should the property glut remains.
“The concern is for the areas at the fringe of KL, the Klang Valley, as well as some parts of Johor and Penang.
“We want all developers to study the audience in detail, to determine the right target market to avoid further excess stocks.
“Because once this (excess) happens, it actually affects all relevant stakeholders and the overall economy at large,” he added.
By 2018, Johari said there will be an estimated 3.9 million sq m of available office spaces and approximately over 1.86 million sq m of shopping malls.
Unsold residential properties for the first quarter of 2017 stood at 130,690 units.
The number includes overhang and unsold properties under construction, SoHo (small office/home office), as well as serviced apartments.
Still, the government would consider some exceptions for new project developments in strategic locations such as KLCC and Bukit Bintang, but it is still subject to the approval of the Urban Wellbeing, Housing and Local Government Ministry.
“Developers would need to submit a written proposal to the ministry and the committee would then evaluate the proposals, whether they are deemed fit and necessary for construction depending on the location,” he said.
The move to provide some leeway on certain residential developments in key strategic locations serves as a mechanism to maintain healthy inflow of foreign investments into the country.
“We have to be fair to some of the developers which purchased parcels of land at RM3,200 per 0.09 sq m, because it is impossible for them to develop any developments with that price tag below RM1 million.
“Therefore, if developers are granted the go-ahead on their respective developments, they can proceed with it as long as they can continue to attract foreign investors,” Johari said.