No such thing as a U-turn on high-end project freeze, says Johari
KUALA LUMPUR: Second Finance Minister Datuk Seri Johari Abdul Ghani has dismissed the notion of a U-turn over the move to freeze approvals for new luxury property developments.
“There is no such thing as a Uturn. This is a cabinet decision. Unless there is something significant, (then) we will look into it,” Johari said on the sidelines of the Malaysian Institute of Economic Research’s (MIER) National Economic Outlook Conference 20182019 yesterday.
He said the freeze on approvals for shopping complexes, offices, serviced apartments and luxury condominiums priced over RM1 million, since Nov 1, would not affect projects that had been approved.
“We are not stopping developers from developing projects. However, we want developers to relook at building projects above RM1 million,” Johari added.
Works Minister Datuk Fadillah Yusof on Monday reportedly said although the decision was taken by the cabinet following a report by Bank Negara Malaysia on an oversupply of high-end properties, the freeze did not involve all projects.
Such approvals would be given on a case-by-case basis, he said.
Johari said the move followed Bank Negara Malaysia’s advice and part of efforts to safeguard the banking sector.
“If we don’t regulate on what has been advised by Bank Negara, it would affect the banking sector,” he said.
Most development projects are funded by banks, Johari explained. If a developer is unable to sell its projects, the bank will have problems in terms of nonperforming loans.
On concern over affordability of 1Malaysia People’s Housing Programme (PR1MA) houses, he said the government was addressing the issue.
He noted that under 2018 Budget, 210,000 units of affordable houses priced RM250,000 and below would be developed.
“We recognise that affordable house demand in the country is around 48 per cent (of total housing need). But the supply today is 24 per cent to 28 per cent.
“We want to make sure the gap is being filled. Based on Bank Negara’s statistics, a lot of rejection for people applying for loan is because the units are above RM250,000.”
Meanwhile, Johari said the government had identified a few measures to reduce the burden of people in the light of rising fuel prices.
While the government had yet to finalise the measures, he said any measure should be targeted at those who were affected by this.
“We can’t find ways that can satisfy everybody. Therefore, the prime minister wants more time for us to look at it,” he said.
Johari reiterated that if petrol (RON95) was retailed at RM2.50 per litre for three consecutive months, the government would intervene to ease the rakyat’s burden, particularly the B40.
Meanwhile, Fadillah in a statement yesterday also clarified that there was no such thing as a “Uturn” in the policy.
He said the decision made by the cabinet on the matter was final and he had also explained the arising confusion to Johari.
“I was merely giving a further explanation on the issue and in detail, I said the policy was subjected to only new projects and views from Bank Negara.
“The explanation was made as a reminder to developers to be more cautious so that there would not be any projects that are unsold.
“Any projects that have been approved or in progress before Nov 1 can still proceed.”