KUALA LUMPUR, Nov 23 — Haphazard construction of new property without regard for market forces was the reason for the existing oversupply of real estate, said an industry group.
The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) said this when expressing support for the government’s decision to suspend approval for property valued above RM1 million.
It said Bank Negara Malaysia has demonstrated that there was currently RM35 billion of unsold property of various types in the country, and that more effort must be made to ensure these are taken up before more are constructed.
“PEPS views the causes of property market overhang to be developers’ indiscriminate building of properties, a lack of market studies and financial feasibility studies being carried out prior to building, no coordination on planning among local authorities and indiscriminate approvals.
“Other causes include the delay in gazetting of local plans that leads to uncontrolled development and higher cost as well as artificial demand created by members of the public for fear of losing out on choice properties,” it said in a statement.
It also supported BNM’s proposal to consolidate the affordable housing sector under a single authority, and suggested Singapore’s Housing Development Board (HDB) as a possible model.
BNM warned in a report last week that there was a supply imbalance in the property sector that could endanger the rest of the economy if not addressed.
This prompted Putrajaya to impose a moratorium on approval for new property priced RM1 million and above, but with various exemptions.
