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KUALA LUMPUR: Fourth Malaysian prime minister Tun Dr Mahathir Mohamad has raised concerns about the current property development boom in here.
In a posting on his blog on Tuesday, Nov 30, he asked if the current property boom could last despite a growth in the population of the city and its outlying Greater Kuala Lumpur area.
"At independence, the population was only 350,000. Today, the Klang Valley has a population of almost six million. Obviously, the businesses and the workers at all levels need space to live and work," he said.
"But it is not impossible that the provision for these would not outstrip the rise in population and their spending power," he added.
He noted that there was a burgeoning supply of new high-rise residences and office towers in the country, saying it was amazing and it made Malaysia look like a "newly-developed country".
"I once thought that the tower crane should be included in the coat-of-arms of KL City Council because they were all over the city. KL grew at a rapid pace and the skyline changed almost every day," he said.
However, he raised concerns about shopping complexes being developed, sometimes next to each other, as they would have to compete for visitors.
"There will not be enough to support all the complexes. Some will survive, some will die," he said.
"Already we have seen a few hyper-market chains going out of business. Will this not happen to a few of the shopping complexes? Will this not happen to the other major development projects?" he asked.
Drawing cautionary tales from Japan and Hong Kong, he said the latter had not recovered from the aftermath of the property bust following its boom period from the 1980s to the 1990s.
"Land was sold at US$3,000 (RM9,480) per sq foot. Everyone was rushing to buy expensive land because the market for apartments and office space seem to be forever. Then suddenly the market dried up," he said of Tokyo's property boom.
"It was the same with Hong Kong. The economy collapsed because of overbuilding," he said.
He added that in some respects the sub-prime crisis that set off the financial and economic collapse was related to the construction industry.
Mahathir also highlighted new megaprojects announced, namely the Sungai Buloh KL City Centre, the KL Financial District and the 100-storey Merdeka Tower.
"Some people say that even the Petronas Twin Towers are empty. Well they are not fully occupied. This is because of a policy to allow only prestigious corporations and institutions to have the Twin Towers as their address," he said.
However, Mahathir claimed that Petronas has received enough requests for space for it to decide to increase its shopping mall area and add a forty-storey tower.
"I should really be advising Petronas to abandon its current project. But here I am talking about overbuilding in KL. Really I shouldn't. But I am really concerned over the possibility of the bubble bursting," he said.
In a posting on his blog on Tuesday, Nov 30, he asked if the current property boom could last despite a growth in the population of the city and its outlying Greater Kuala Lumpur area.
"At independence, the population was only 350,000. Today, the Klang Valley has a population of almost six million. Obviously, the businesses and the workers at all levels need space to live and work," he said.
"But it is not impossible that the provision for these would not outstrip the rise in population and their spending power," he added.
He noted that there was a burgeoning supply of new high-rise residences and office towers in the country, saying it was amazing and it made Malaysia look like a "newly-developed country".
"I once thought that the tower crane should be included in the coat-of-arms of KL City Council because they were all over the city. KL grew at a rapid pace and the skyline changed almost every day," he said.
However, he raised concerns about shopping complexes being developed, sometimes next to each other, as they would have to compete for visitors.
"There will not be enough to support all the complexes. Some will survive, some will die," he said.
"Already we have seen a few hyper-market chains going out of business. Will this not happen to a few of the shopping complexes? Will this not happen to the other major development projects?" he asked.
Drawing cautionary tales from Japan and Hong Kong, he said the latter had not recovered from the aftermath of the property bust following its boom period from the 1980s to the 1990s.
"Land was sold at US$3,000 (RM9,480) per sq foot. Everyone was rushing to buy expensive land because the market for apartments and office space seem to be forever. Then suddenly the market dried up," he said of Tokyo's property boom.
"It was the same with Hong Kong. The economy collapsed because of overbuilding," he said.
He added that in some respects the sub-prime crisis that set off the financial and economic collapse was related to the construction industry.
Mahathir also highlighted new megaprojects announced, namely the Sungai Buloh KL City Centre, the KL Financial District and the 100-storey Merdeka Tower.
"Some people say that even the Petronas Twin Towers are empty. Well they are not fully occupied. This is because of a policy to allow only prestigious corporations and institutions to have the Twin Towers as their address," he said.
However, Mahathir claimed that Petronas has received enough requests for space for it to decide to increase its shopping mall area and add a forty-storey tower.
"I should really be advising Petronas to abandon its current project. But here I am talking about overbuilding in KL. Really I shouldn't. But I am really concerned over the possibility of the bubble bursting," he said.
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