Few days ago, another new measure which is supposed to help in controlling speculation was announced. According to the report in The Star, this will help to stop ‘property clubs’ from walking away with handsome profits, especially in the Klang Valley. Datuk Rahman Dahlan who is the Minister of Urban Wellbeing, Housing and Local Government announced that any developer selling more than four units of their properties to a single buyer or group must obtain prior approval. This move will most likely start to affect the property clubs as they typically takes up many units as they are buying in bulk for their members to take up. Due to the many units booked, developers would normally grant them higher discounts than individual buyers and this in turn benefits the members who have extra margin when they sell once the properties are completed.
Majority of the comments online are either negative or critical of such a move, saying that the prices should be left to market demand and supply and not due to controls by the government. Besides this measure, the Minister said that he will also be calling for a meeting with REHDA (Malaysia). He did not however said what would the meeting be discussing or whether this measure can be negotiated upon.
Personally, I am supportive of such a move but I must say that this is quite tough to implement. Anyway, even for property clubs, if they do not buy with one name, they can still buy in bulk but every 4 units with one name. The main reason why I am supportive of such a move is because I cannot believe that the number of units on sale can be more than half sold right on the day of launch. I have been to launches even in the morning time and even by then, nearly all the units were already taken leaving those on the higher floors which are usually more expensive.
I think developers should also welcome this move because there is no point in earning huge profits only for the whole market to be so speculative that bubbles starts to build. Drive around the newly completed condos in Penang at night and you may know what I mean. I remember when I moved into my condo many years ago, within 6 months, more than half of the units were already occupied. Today, this is no longer the case. Everytime a new project is completed, the total number of units up for sale may be more than half of the whole project!
We shall see how this can be implemented. Who knows, maybe REHDA said they support this move?
written on 17 Feb 2014
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