A NATIONAL glut of homes has compelled the government to temporarily freeze approval for luxury projects since the beginning of the month, the Straits Times reported today.

A Bank Negara report published in June detailing the oversupply of high-end property prompted the cabinet decision, Second Finance Minister Johari Abdul Ghani said yesterday.

“The Bank Negara report takes into account high-rise condominiums, shopping malls and commercial units, including those that are worth more than RM1 million,” he said after an event in Kuala Lumpur.

The temporary freeze affects shopping mall, commercial and residential developments which units cost above RM1 million each.

“This will be temporary until we can clear all the the 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 adversely affect the economy,” he said.

In contrast, Johari told NST that said the government would continue to drive the development of affordable homes, specifically those priced below RM300,000 each, which were in short supply.

“In this sector, there is a disparity between the 48% demand for affordable homes and the supply that only meets 28% of that. This is the area that needs to be addressed swiftly.”

The government of Johor, which the BNM report said housed 120,000 units of unsold residential property, said it was considering relaxing restrictions on foreign home ownership of homes to reduce the glut of unsold properties in the state, reported The Star.

Housing and Local Government committee chairman Md Jais Sarday said existing rules allowed foreigners to buy only property priced above  RM1 million.

“Maybe we can look at relaxing the requirements based on the size of the houses, allowing them to purchase homes which are more than 1,000sq ft (93sq m) but less than RM1 million,” he said yesterday. – November 20, 2017.