In a statement, CAP president SM Mohamed Idris said it was good that the government had finally decided to freeze luxury property developments from Nov 1, 2017 due to a glut of such properties.
According to reports, Second Finance Minister Johari Ghani had announced that the freeze will affect high-rise condominiums, shopping malls and commercial units.
“CAP had warned of this scenario 28 years ago in our book ‘Housing for the People’. However, it fell on deaf ears till now,” he said, adding that he had repeated the message many times since then.
“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.”
Mohamed Idris also lamented how the problem of catering property development to the luxury market has now spread.
“Such a problem has been manifested 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,” Mohamed said.
He suggested that the situation in Penang may be a bit better with the Penang state government having 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.”
He then called for 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 thousands of ringgit because, after paying the bank, the property unit will almost double in value,” he said.
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