KUALA LUMPUR – November 22, 2017: The Real Estate and Housing Developers’ Association (Rehda) maintains that the temporary freeze on future development of high cost properties is not the cure-all for the property glut.
It is the association’s contention that aside from the freeze, the government should give more incentives for completed properties so as to attract more buyers.
A mere blanket freeze – imposed following a report by Bank Negara Malaysia (BNM) detailing the oversupply of luxury properties – can also drive up prices once the economy improves, wrote Rehda president Datuk Seri FD Iskandar Mohamed Mansor in a WhatsApp message to The Mole.
“What will happen when the economy fully improves and the level of confidence comes back? When people want to buy and there’s not enough stocks, it will push the price up.
“This problem can also be addressed by giving stamp duty exemptions and removal of certain restrictions for completed units.”
Iskandar added that while the country needs a consistent supply of 180,000 to 200,000 of new dwellings a year, it only managed to produce 71,000 last year.
According BNM’s June report, there is an oversupply of houses priced above RM500,000 and an undersupply of the ones priced below RM250,000.
The report also highlighted a decade-high level of unsold units at 130,690 units, the bulk of which are priced above RM250, 000.
In a statement issued last night, Rehda called for the government to reconsider the indefinite freeze, arguing that it is impractical to build properties below RM1 million in certain areas where land prices are high.
Rehda pointed out the need for developers and the government to conduct a comprehensive demand-supply market research in places that are earmarked for development so as to avoid oversupply.
The association also maintains that low-levels of disposable income and purchasing power, along with the rising cost of living, are the main reasons why Malaysians cannot afford to buy houses.
Rehda’s statement was issued in response to Second Finance Minister Datuk Seri Johari Abdul Ghani’s explanation that the freeze was to prevent the property glut from worsening and adversely affecting the economy.
“This will be temporary until we clear all 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 impair the economy,” said Johari on Monday.