KUALA LUMPUR (Dec 8): Opposition lawmaker Tony Pua questioned as to why the Cabinet was adamant in ignoring policy prescriptions by Bank Negara Malaysia (BNM) on the property market imbalance.

In a statement this morning, Pua, who is MP for Petaling Jaya Utara and DAP national publicity secretary, said the Cabinet's constant u-turns over its announced luxury property ban were another example of its tendency to ignore expert policy advice in favour of ill thought out knee-jerk reactions.

He said BNM had reported last month on the substantial supply and demand imbalance within the country's property market.

He said the report found that new property launches were skewed towards the high-end sector of the market priced above RM250,000.

Subsequently, the government issued a directive halting approvals for all new high-end property developments priced above RM1 million per unit.

Pua said based on the latest announcements by the Housing and Local Government Minister, Datuk Seri Noh Omar, and the Second Finance Minister, Datuk Seri Johari Abdul Ghani, earlier this week, property developers can now appeal to ministers for high-end project approvals on a case-by-case basis.

"Basically, the ministers have now granted themselves full discretionary powers to approve projects for developers.

"The arbitrary nature of this new policy [will] have serious consequences to short and longer term investments by both foreign and domestic investors in Malaysia," he said.

Pua highlighted that BNM's report had outlined six different policy recommendations to dealing with specific issues in the property market.

"Hence, why doesn't the government just adopt the advice already given to them by BNM?" he asked.

Pua said among the recommendations from BNM were increasing encouragement for the rental market, and the government increase its efficiency in providing and allocating affordable homes.

He said BNM also suggested better management to address the large incoming supply of commercial properties.

"This includes ensuring the commercial viability of the project is thoroughly assessed and for developers to be cognisant of demand conditions.

"However, the government's blanket ban lacked any mechanism that would allow an objective assessment of each development.

"Unlike these policies, the government's knee-jerk ban would only halt the approvals for future high-end developments without managing the already severe level of oversupply.

"It is difficult to understand why the government has chosen to ignore Bank Negara's relatively sound advice to address these problems," said Pua.