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clock 12-04-2017
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Set Quota to Prevent Oversupply in Properties

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The growth property developments in Greater Kuala Lumpur and Negeri Sembilan have now indicated a trend that people are willing to travel in order purchase properties here.

To prevent overbuilding that in turn leads to a supply glut, an expert is urging the government to limit a number of properties that developers are allowed to build in a particular place, reported The Star.

"An area would face the danger of overbuilding if the new supply of housing in the neighbourhood exceeds the rate in which the population would increase" said Cha-Ly Koh, CEO of, a website that provides statistics on real estate transactions in Malaysia.

She explained that there is no ceiling on the type of projects permitted as many cities and major towns do not conduct studies to anticipate the type of developments required in a particular area in the future.

"For example, an owner of land that is zoned under residential can build up to 200 units of condo units. But because a council does not control the total amount of supply in that year, there could be 10 developers who decide to build at the same time.”

"This leads to an oversupply of residential units in that neighbourhood" she noted.

Moreover, she pointed out that densification, or building developments with a higher population density, is "not always a bad thing if done properly”. For instance, it is more practical to build public transportation and infrastructure in areas with more people.

But there should be proper planning and control by the government on the utilisation of dwindling space and land.

"Consider Greater Kuala Lumpur, which has grown to almost the border of Negri Sembilan. We have allowed the city to grow sideways or sprawl without much control because there is no limitation to the amount of area for the city's growth.”

"Imagine the infrastructure and utilities that need to be put in to support these network growths. Our resources are being stretched outwards instead of focusing on the existing ones" added Koh.

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