I REFER to Datuk A. Jalil Hamid’s insightful article in the New Sunday Times on the property glut (“Housing glut: Who’s at fault?” — Nov 19).
He raised many concerns that had been raised by Bank Negara with the cabinet in June, that Malaysia was facing a residential property glut with the over-
supply at its highest level in 10 years.
On Sunday, Second Finance Minister Datuk Seri Johari Abdul Ghani announced a temporary freeze on the approvals for luxury property development.
Is this move sudden and drastic? Was there consultation with stakeholders or warnings to developers to slow down the construction of high-end properties and commercial projects?
Jalil’s article said 61 per cent of the unsold units were high-rise apartments.
By 2021, one in three offices would be vacant and 140 malls would enter the market.
This oversupply could cause a glut and even a collapse in the property market. Who is at fault? That is the most vital question.
Is it developers or commercial banks? I would add that the authorities should take part of the blame for the situation.
How is it that so many banks have provided financing without examining the marketability or feasibility of such projects?
Why do developers rush to build high-end properties when there is a low demand for it?
Perhaps Bank Negara could have better advised commercial banks to be more cautious before they awarded loans.
Local authorities, too, could have scrutinised projects more stringently and do studies before issuing approvals, especially on building of commercial buildings, such as shopping complexes and malls.
Hence, a task force should be set up, under the Finance Ministry, to address the problem.
The task force should have representatives from the ministry, central bank, developers and local authorities.
It has to be done now, before the glut worsens.
There should also be more consultation among parties concerned on the property market and future development projects for high-end properties.
The task force should look into the undersupply of affordable homes, those costing RM250,000 and below per unit, where the demand is high at 48 per cent, but supply is only at 28 per cent.
Banks could be urged to consider approving housing loans to low- and medium-income groups.
The concept of rent to own should be reviewed by the task force, and revisit the proposed Enactment of Residential Tenancy Act and the Tenancy Tribunal to safeguard the rights of tenants and landlords.
We have a patriotic responsibility to fulfil our national social goals to achieve peace, prosperity and stability for Malaysians, especially the less fortunate.
This worthy aspiration is more meaningful and relevant with the impending 14th General Election.
TAN SRI RAMON NAVARATNAM
Chairman, Asli Center of Public Policy Studies