Property freeze: Why does govt not listen to Bank Negara, asks Pua


PETALING JAYA: Petaling Jaya Utara MP Tony Pua wants to know why the government implemented the luxury property freeze instead of heeding advice from Bank Negara Malaysia (BNM) on tackling the supply-demand imbalance.

Calling the freeze another example of the government’s tendency to ignore expert policy advice in favour of knee-jerk reactions, he said BNM’s report on the matter had outline six different recommendations for dealing with specific issues in the property market.

“Why doesn’t the government just adopt the advice already given to it by BNM?

“It is difficult to understand why the government has chosen to ignore BNM’s relatively sound advice to address these problems,” he said in a statement today.

The government’s decision to freeze luxury property developments valued at over RM1 million followed a BNM report warning that unsold residential properties were at a decade-high level.

BNM added that the glut could worsen if the current supply-demand conditions persisted.

The directive, which came into effect on Nov 1, covers high-rise condominiums, shopping malls and commercial units.

Pua said the central bank had suggested increasing encouragement for the rental market to address the high level of unsold residential properties.

It also recommended that the government increase its efficiency in providing and allocating affordable homes.

To address the large incoming supply of commercial properties, he said, BNM had suggested better management, including ensuring a thorough assessment of the projects’ viability and making certain that developers are cognisant of demand conditions.

The report also recommended the repurposing of vacant commercial buildings to alleviate the problem of high office vacancy rates and low rental rates in existing buildings, and increasing demand for existing space through rental rebates or greater efforts to attract foreign business.

“The government’s halting of new approvals for high-rise residential developments over RM1 million does nothing to address these issues,” Pua said.

“Unlike these policies, the government’s knee-jerk ban will only halt the approvals for future high-end developments without managing the already-severe level of oversupply.”

The DAP national publicity secretary urged the government to immediately take heed of BNM’s recommendations, and conduct a thorough study on the matter with all stakeholders and think tanks.

He also repeated his criticism of the government’s seemingly inconsistent stand on the property freeze, saying it had now made a “near complete U-turn” on the issue.

Based on the latest announcements by Urban Wellbeing, Housing and Local Government Minister Noh Omar and Second Finance Minister Johari Abdul Ghani, he said, property developers could now appeal to ministers for project approval on a case-by-case basis.

“Basically, the ministers have now granted themselves full discretionary powers to approve projects for developers who can sweet-talk their way to winning the hearts of the ministers.

“The arbitrary nature of this new policy will have serious consequences for short and longer term investments by both foreign and domestic investors in Malaysia,” he said.