Governments have an important role to play when it comes to development. There is always that balance of encouraging more developments (when the market is not that positive) versus controlling it so that it is not overly built (when the market gets too hot for comfort). When we look at countries where the property prices have gotten too high, there will always be that argument that the government should have done more to ensure prices do not rise too fast. For example, releasing more land for development or to build enough so that the supply is equal to demand and thus prices do not rise indiscriminately. So what happens when the oversupply has happened?
Article in thestar.com.my here. Naza TTDI Sdn Bhd deputy executive chairman and group managing director SM Faliq SM Nasimuddin urged the government to take more proactive steps to address and stabilise the current oversupply in the property industry with more regulations and thus ensuring its sustainability. He said, “Despite all these (reports of empty office space), the government keeps on releasing more office space in Kuala Lumpur. This is a challenge for us. When you have a piece of land and you know there’s an oversupply (and) there are no controls in terms of what’s coming up next, it’s very hard for us to plan ahead.
Faliq shared further. “Controls in terms of land utilisation, conversion of land from one use to another and plot ratio approvals are important. In Singapore, Australia and even Britain, it is rare for land conversion to happen. The authorities or governing body would not allow it until and unless there is a certain reason for it. The minute you allow these changes to happen (so easily), the supply becomes tremendous.”
“In developed countries, whenever land is purchased, the buyer is told what he can and cannot do and the authorities are quite strict about it. So, even before you buy the land, you know what you are able to do with it. When the government releases land for sale, they do so based on what is needed and required at that point of time.” There are a lot more proposals from Faliq. Do read the Article in thestar.com.my here.
I think it’s extremely important for the government to have a long term vision of the development they want to have. Else, the development will be haphazard most of the time. Without a vision, many issues may not be transparent and this will not be a level playing field for everyone. Getting the public feedback is necessary for check and balance because most developments will affect the public. Let’s not have another equivalent as the still on-going debate about a development in Taman Rimba Kiara, okay? Happy following.
written on 18 July 2019
Article written and edited by Charles. News article summarised by Dina Batrisyia.
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