Government Is Tackling Property Glut, Says Minister
PETALING JAYA: The government is taking measures to resolve the property glut but it has to act in such a way as to not send the wrong signal to investors, Second Finance Minister Johari Abdul Ghani said.
"The government is discharging its responsibility by conveying the risks to the real estate sector. There will be no bailouts if businesses get into trouble because of overexposure" he told FMT.
One of the measures is the decision to freeze luxury property developments valued at over RM1 million. The directive, which came into effect on Nov 1, covers high-rise condominiums, shopping malls and commercial units.
Johari said other measures included requiring businesses to assess their own risks and to face the consequences should the risks materialise.
"Banks will be prudent in their financing activities and may not provide financing if the high-end property market exposures are too high" he added.
Johari said the freeze on the approvals for shopping complexes, offices, and luxury condominiums was time-bound.
"Rather than indefinite, the measures announced are temporary and preemptive.â€