KUALA LUMPUR: The government has decided to indefinitely freeze approvals for luxury property developments from Nov 1 to control the oversupply from adversely affecting the economy, said a New Straits Times report yesterday, quoting Second Finance Minister Datuk Seri Johari Abdul Ghani.
Johari said the decision was made after the cabinet scrutinised a detailed Bank Negara Malaysia report, published in June, on the real estate glut.
In the news report, he highlighted that there was an overflow of luxury projects in the country, and said that the freeze would be on shopping malls, commercial complexes and condominiums which sell 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,” he was quoted as saying.
When asked how long the freeze will be, Johari said it would be indefinite until there was a rise in market demand for expensive properties.
Meanwhile, he said the government would continue to drive the development of affordable homes, specifically those below RM300,000 per unit.
“In this sector, there is a disparity between the 48% demand for affordable homes and the supply that only meets 28% of that. This is the area that needs to be addressed swiftly,” he added.