Remember just the other day when the government decided to freeze ALL Luxury and commercial projects within KL? There were supporters actually who said that this will help to reduce the current oversupply, which is really the commercial offices as well as luxury units. Perhaps not immediately reduce but after a couple of years perhaps. There were also opposition to the idea that ALL approval are to be frozen because there are definitely some projects worth going ahead, especially those with good demand. Anyway, within the next day one minister said that the freeze order was not a blanket one. It is based on a case by case basis. Another minister immediately responded that there are no such thing as a case to case basis. This was the decision of the cabinet and thus all should follow. Just two days ago, it was now quite certain that the approval freeze is no longer a blanket one but would be on a case by case basis.
Now, our Second Finance Minister Datuk Seri Johari Abdul Ghani says he will ask the prime minister to allow such projects in major cities. He explained that the freeze was aimed at developers whose business is not in property development; they are not serious developers. He said that he will meet the Prime Minister and ask for the ban to be lifted for certain viable developments. Here’s that article in TheEdge. Within the same article, he also mentioned that some government agencies are building homes to fulfill key performance indicators and not meeting public’s needs. (Frankly, the KPIs should be how fast the homes are sold and occupied. Not just how many were built…) He urge private developers to work with the government instead of leaving them to the government agencies. (I think for this to work well, perhaps all affordable homes should be a joint-effort. The research to be done by the private developers who are usually more diligent because if they built at the wrong place, the company will suffer huge losses. As for government agencies building at the wrong places, I have not heard of anyone being held accountable yet)
There is one rational article in NST today. Here’s that full article. NST: Lock, Stock & Barrel: Exercising discretion in luxury projects This was what he concluded, “I suggest that any ban of this nature be tempered with good economic sense, and any application be considered on a case-by-case basis, and approval be given on its individual merit. In this way, the government can exercise some form of control in sectors that are overbuilt, while at the same time, exercise discretion in cases which merit a development going forward.” (Makes full sense. Each project being rated according to its merits and to be approved after looking at the sectors that are overbuilt. Perhaps some neutral opinions are needed in this case. Please do not just rely on analysts though because just looking at numbers and percentages does not mean it’s the best. Seriously, a state with the highest percentage of oversupply does not mean it’s worse off than another state with just a minimal oversupply…) Cheers.
written on 2 Dec 2017
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