Rehda wants authorities to reconsider approvals freeze

PETALING JAYA (Nov 21):  The Real Estate and Housing Developers Association (Rehda) Malaysia hopes that the authorities will reconsider the new ruling to freeze approvals of developments, including condominiums priced above RM1 million, it said in a press statement today.

“There are certain areas in the country where land prices are high and building properties below RM1 million is impractical. However, we believe that in certain locations across the city, there is still demand for high-end properties and free-market should prevail. Nevertheless, what is needed now is an in-depth research and feasibility study before developers embark on new projects by all developers, in which we continuously urge Rehda members to undertake,” it said.

The association also noted that following the cooling measures announced since 2014, not many developers have been building properties above RM1 million.

“… Rehda is of the opinion that one of the main reasons for such oversupply is the mismatch in supply and demand. As the voice for private developers in Malaysia, Rehda has always advocated the need for a comprehensive data to establish the demand and supply of properties in the right location. The availability of the data will help give a more comprehensive and accurate picture of which areas where demand is located the most and vice versa, thus preventing oversupply.

“As policy makers, the authorities play an important role in ensuring that the data collected is used efficiently and urge the government, in particular Bank Negara Malaysia, the National Property Information Centre and the Ministry of Urban Wellbeing, Housing and Local Government to work together in utilising and streamlining the data available. These timely data will tremendously assist developers and relevant industry players in making proper and informed decisions in regards to their development projects.

“Whilst we are happy to note that the income per capita of Malaysians in general has improved by about 46% (since 2010), this is not reflective in the disposable income and purchasing power of the average Malaysians due the rising cost of living. This is a fundamental reason why many Malaysians cannot afford to purchase property as their household debt is high. We believe that some measures need to be taken by the powers that be to address this serious issue,” it said.

The association added that it is still seeking clarity on the directive, including which region will be affected by the new ruling.

“We wish to fully understand the details of the announcement, made by the Minister of Finance II Datuk Seri Johari Abdul Ghani,” it said.

On Nov 20, the minister had said Putrajaya had ordered for approvals for the development of shopping complexes, offices, serviced apartments and condominiums priced above RM1 million to be temporarily halted as a report by Bank Negara had highlighted a surplus in their stock.

“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 said.