Second Finance Minister Datuk Seri Johari Abdul Ghani announced on November 17 that the government had sent a directive to halt all approvals for high-end residences, shopping complexes and office buildings priced over RM1 million.
The freeze came after Bank Negara’s report on the substantial supply and demand imbalance within the country’s property market. The report found that new property launches were skewed towards the high-end sector of the market.
The Second Finance Minister subsequently reaffirmed the blanket ban after his fellow Cabinet colleague, Works Minister Datuk Fadillah Yusof said that developments would be reviewed on a case by case basis.
The ‘blanket ban’ had smacked of being a ‘hare-brained’ policy prescription as the Government started granting exemptions to projects which the Government had a vested interested. In particular, the Minister of Federal Territories, Dato’ Seri Tengku Adnan Tengku Mansor said the 1MDB-linked projects – Tun Razak Exchange and Bandar Malaysia were “pre-approved”, and are hence exempted.
The fact that Bandar Malaysia has not even found a developer with a plan appears immaterial to the ban exemption.
The biased exemption of such projects by Government-linked companies (GLCs) created an uproar among the private sector, who then lobbied hard to ease the ban.
Yesterday, the Government did another double-twist somersault on its ‘blanket ban’. Two statements by Urban Wellbeing and Local Government Minister Tan Sri Noh Omar and Datuk Seri Johari, suggested that the Government will now allow developers to appeal the ban on a case by case basis.
For luxury residential properties, Tan Sri Noh Omar announced that a four-minister committee to review the project applications comprising of Datuk Seri Johari, Datuk Fadillah, Minister in the Prime Minister’s Department Datuk Abdul Rahman Dahlan and himself. The committee would apparently subject its approvals to criteria including the existing housing condition, the number of houses in that location and those priced above RM1 million, as well as the number of unsold houses.
Separately, Datuk Johari said that developers of office spaces and shopping malls could appeal to the relevant ministers if they find locations that lack those properties and can justify their developments. He even went on to say that “anyone can build an office provided you know how to market it”.
Does the Minister actually think that developers are going to build an office block or a mall that they are not confident in selling?
I was among the first who had criticised that the blanket ban would not do much to remedy the property market imbalance. However, now the Ministers have granted themselves full discretionary powers to grant approval to any developers who can sweet talk way to win the hearts of the Ministers.
Have we now become a communist regime where the Government dictates how many left shoes to manufacture? Two big mistakes here certainly don’t make a right.
The multiple twists and turns worthy of a world-class acrobatic act only goes to prove that the Najib administration is completely clueless in policy-making. How does the above, for example, even address the main issue of the lack of affordable housing in the country and the largest oversupply of residential properties were reported at the RM500 000 to RM1 million segment?
The worst type of Government for any investor, foreign or domestic, is the absolutely lack of predictability and consistency in its policies. The current fiasco will certainly have major short to long term negative implications for Malaysia’s economy. The Cabinet must remedy its knee-jerk policy-making mechanism and instead, conduct a thorough study with all stakeholders, Bank Negara and think-tanks to design a consistent, constructive and incentivised policies to ensure continued growth and sustainability for the property sector and our economy.
Showing posts with label Ku Nan. Show all posts
Showing posts with label Ku Nan. Show all posts
Thursday, December 07, 2017
Friday, November 24, 2017
Ku Nan demonstrates “Malaysia Boleh” spirit by declaring Bandar Malaysia plans ‘approved’ even before master developer selection, to circumvent Cabinet luxury development ban.
Federal Territories Minister Datuk Seri Tengku Adnan Mansor has confirmed yesterday that the 1MDB-linked Bandar Malaysia and TRX would not be affected by the freeze on property approvals for condominiums, serviced apartments, offices and shopping complexes price above RM1 million.
He was responding to a question by PJ Selatan MP, Hee Loy Sian, when he said that the two projects had already received approval ‘in principle’ and could not be stopped from developing.
It is quite clear here that the government’s only principle here is to protect the interests of 1MDB. TRX and Bandar Malaysia are two of 1MDB’s largest assets that need to be developed if the fund wants any chance of staying afloat. They are also two of the biggest slated development projects in KL.
The amazing thing is, the Ministry of Finance has not even declared a winner to the tender for the master developer of Bandar Malaysia. The latest response from the Ministry of Finance last week is that there are 8 companies which have “expressed interest” in developing the massive 486-acres project. DBKL Mayor Tan Sri Mohd Amin had himself told Malaysiakini that they had yet to receive an application from Bandar Malaysia.
If exemptions from the freeze can be given just because of approvals had been given ‘in principle’, what worth is the freeze at all? Does this mean that other ‘planned’ high-end developments, which have yet to submit their planning applications, will also get exemptions?
These exemptions raise two worrying questions about the government’s planned freeze on high-end developments.
Firstly, it would mean that the effectiveness of the supposed ban on high-end project would be severely diluted. Bank Negara’s report showed just how grave the supply and demand imbalance was, projecting 1-in-3 office spaces being vacant in the Klang Valley by 2021, if measures aren’t taken to control it. If this freeze on high-end developments is to be taken seriously at all, the government has to make sure it is fairly enforced across the board.
And secondly, 1MDB gets the special treatment which discriminates against all private businesses.
As per my previous statements on this issue, I reiterate that the purported ‘blanket ban’ against high-end projects with unit values above RM1 million is a hare-brained knee-jerk reaction which is faulty due to the unfair and substantial exemptions granted above. In addition, the policy itself will not only fail to achieve its objectives because it is not properly targeted, it will create greater distortions in the market as well as turn away both domestic and foreign investors.
He was responding to a question by PJ Selatan MP, Hee Loy Sian, when he said that the two projects had already received approval ‘in principle’ and could not be stopped from developing.
It is quite clear here that the government’s only principle here is to protect the interests of 1MDB. TRX and Bandar Malaysia are two of 1MDB’s largest assets that need to be developed if the fund wants any chance of staying afloat. They are also two of the biggest slated development projects in KL.
The amazing thing is, the Ministry of Finance has not even declared a winner to the tender for the master developer of Bandar Malaysia. The latest response from the Ministry of Finance last week is that there are 8 companies which have “expressed interest” in developing the massive 486-acres project. DBKL Mayor Tan Sri Mohd Amin had himself told Malaysiakini that they had yet to receive an application from Bandar Malaysia.
If exemptions from the freeze can be given just because of approvals had been given ‘in principle’, what worth is the freeze at all? Does this mean that other ‘planned’ high-end developments, which have yet to submit their planning applications, will also get exemptions?
These exemptions raise two worrying questions about the government’s planned freeze on high-end developments.
Firstly, it would mean that the effectiveness of the supposed ban on high-end project would be severely diluted. Bank Negara’s report showed just how grave the supply and demand imbalance was, projecting 1-in-3 office spaces being vacant in the Klang Valley by 2021, if measures aren’t taken to control it. If this freeze on high-end developments is to be taken seriously at all, the government has to make sure it is fairly enforced across the board.
And secondly, 1MDB gets the special treatment which discriminates against all private businesses.
As per my previous statements on this issue, I reiterate that the purported ‘blanket ban’ against high-end projects with unit values above RM1 million is a hare-brained knee-jerk reaction which is faulty due to the unfair and substantial exemptions granted above. In addition, the policy itself will not only fail to achieve its objectives because it is not properly targeted, it will create greater distortions in the market as well as turn away both domestic and foreign investors.
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