PETALING JAYA (Nov 21): The temporary freeze on approvals for the development of shopping complexes, offices, serviced apartments and luxury condominiums priced over RM1 million will be a much-needed relief for landlords or owners of office and residential buildings as it will allow the market to absorb the existing large supply through rising population growth, urbanisation and migration to cities, said JLL Malaysia associate director, research and consultancy Veena Loh.
She told EdgeProp.my it was likely a one-off action to temporarily bring down the number of unsold units to a more manageable level.
“Depending on the location, connectivity and quality of the building, the impact can vary. However, there is no exact timeline of how long the freeze will last. So, the full extent of the impact is still unclear.”
“While the exact mechanism on how the freeze will be done or the boundary that it will cover is still unclear, analysts are of the view that this should not be a permanent fixture. The supply and demand relationship in the open market will always adjust itself,” she said.
The freeze aside, she highlighted that the vacancy rates for office space in the Klang Valley would face pressure in the next few years, due to the incoming supply from mega projects like the Tun Razak Exchange, Merdeka PNB 118, KL Eco City, Pavilion Damansara Heights and KL Metropolis.
She also noted that there is a mismatch between existing office supply and the requirements of office occupiers and the agglomeration of sub-par, sub-quality offices that further add to the rising vacancy rate.
In the short term, however, this action can emphasise the problem of overpricing and oversupply, which may prompt developers to reconsider the pricing of their future developments.