The Second Finance Minister Datuk Seri Johari Abdul Ghani had announced that the government is finally freezing luxury property developments from 1 November 2017 because of a glut in this sector.
The freeze will affect high-rise condominiums, shopping malls, commercial units, including those that are worth more than RM1 million.
CAP wants to reiterate that we had warned of this scenario 28 years ago in our book Housing for the People. However, it fell on deaf ears till now.
It said: “The crux of the housing problem is that the country’s building resources were channelled not towards where people’s housing needs are, but towards where the market which could pay was.”
Such problem manifests nationwide, leading to an over production of unusable expensive properties that a large segment of the Malaysian population cannot afford. For example, the term “affordable housing” is grossly misleading because it can range up to RM400,000 per unit.
The Penang state government lowered this limit to RM300,000 on the island and RM200,000 for those in Seberang Perai, but even then it is beyond the reach of most.
We have to consider that this serious housing policy flaw, resulting in a glut of unsold property units, can drive developers, the banks and the country to financial ruin.
We urge the government to focus on delivering housing for the poor, either low-cost flats or those rent-to-own types. It is pointless to oversupply expensive “affordable housing” costing hundreds of thousand Ringgit because, after paying the bank, the property unit will almost double in value.
LETTER TO THE EDITOR, 21 November 2017