KUALA LUMPUR: Approval for new luxury development projects will still be given, but on a case-by-case basis.
Works Minister Datuk Seri Fadillah Yusof said the government's decision to freeze approvals for new luxury project developments was made based on Bank Negara's recommendation.
The move, however, does not involve all projects.
"This is not a blanket stop order… The government is sending a message to developers to study whether there will be (sufficient demand for a project) or not, before they decide (to proceed).
"If you sell RM1 million condo (units) located in (unattractive) areas, it may not attract buyers.
"But if you sell RM4 million condominiums around the Kuala Lumpur Convention Centre (KLCC) area, you will definitely get buyers, especially among expatriates," he said, after launching Malaysia's first MyBIM centre at the Sunway Putra Tower here.
Fadhillah said being selective in approving high-end real estate development projects will help address the surplus in the luxury segment.
On Sunday, Finance Minister II Datuk Seri Johari Abdul Ghani said that the Cabinet has decided to freeze approvals of luxury projects starting Nov 1.
The move was made after scrutinising a detailed Bank Negara report published in June on Malaysia’s high-end real estate glut, which has also outstripped market demand for affordable homes.
Johari said that the Cabinet decided to temporarily stop developments of shopping malls, commercial complexes and condominiums which sell their units above the RM1 million threshold.