Development freeze applies nationwide, but temporary, says Johari

johari-pembangunanKUALA LUMPUR: The government’s order to freeze approvals for shopping complexes, offices, serviced apartments and luxury condominiums priced above RM1 million applies to the entire nation.

In clarifying this, Minister of Finance II Johari Abdul Ghani said if there were any disputes or appeals, then the cabinet might look at it based on the area.

He said the freeze was just a temporary measure and that once the level of unsold units came back to within “reasonable” levels, it would be lifted.

Johari was speaking to EdgeProp.com on the sidelines of the launch of Maybank Islamic Bhd’s rent-to-own scheme, HouzKEY yesterday.

The report quoted him as saying the freeze was to address the oversupply in the commercial property segment and the concerns of the banking sector.

Johari said there were about 30 million sq ft of vacant spaces in the shopping mall and office sector, and that 130,690 residential properties were unsold in the first quarter of this year, the highest over the past decade.

Also, 83% of the unsold units are priced above RM250,000, and 61% of them are high-rise properties.

“Basically, if you look at the shopping malls and offices, I think [the situation] is oversupply. And at the same time, some of these projects come with high-end condominiums that are actually part and parcel of the developments. So that is the reason why the high-end [condominium segment] is included [in the freeze],” the EdgeProp.com quoted him as saying.

He added that the move was also to tackle the problem of the supply of affordable houses being unable to meet demand.

“I think we very much need the affordable houses to reach the people. [Hence], I think this is where we need to do some balancing and I’m sure it is also good for the developers.

“In fact, without even freezing [the development], the feedback that I got from the financial institutions, they are also reluctant to finance all these high-end and commercial properties at this moment because they also know about the oversupply [situation],” he was quoted as saying.