Property News Malaysia: Redevelopment is now possible following international practices

Property News Malaysia: Redevelopment is now possible following international practices

When redevelopment is not possible

In Malaysia, if there are proposals for a development to be sold for re-development and there are 500 owners within the development, this re-development can only go through if 500 out of 500 owners agree to the proposal. Never mind if every owner will be offered a very lucrative offer or not. 100 percent of every owner must agree for this re-develppment proposal to move ahead. If there are 500 owners and just 1 says no, then this potential re-development project will not move ahead and will have to wait till the next opportunity if there are.

What about Hong Kong?

In Hong Kong, the en bloc sale can happen when 90 percent of a development’s residents agree to the sale. In other words, re-development is possible if 90 percent of all the owners agree to it. In numbers, this is 450 owners out of 500 owners. By the way, convincing 450 people out of 500 people is NOT easy as well yeah. This is why all these would take time too and time is money. Sometimes, it does not happen. Info source for HK en bloc sale: PropertyGuru.com

What about Singapore?

In Singapore, this is what stratatb.gov.sg says:

En-bloc sale by majority consent

An en-bloc sale is governed by the Land Titles (Strata) Act. The sale is to be supported by the requisite majority consent under the Act:

• Developments less than 10 years old – at least 90% by share value and strata area
• Developments 10 years and older – at least 80% by share value and strata area

Do read more here: stratatb.gov.sg says:

When policies are clear, it will support the redevelopment. This is the latest about en bloc sales in Singapore. It seems to be slowing down for 2023. News in channelnewsasia.com

Budget 2024 will change this redevelopment policy

During the Budget 2024 announcement, Prime Minister Datuk Seri Anwar Ibrahim who is also the finance minister, said this about redevelopment programs moving forward.

Anwar said, “To ease with redevelopment of the strata scheme the agreement with the people for en-bloc sales will be reduced from 100 per cent to a number that we feel is suitable and consistent with international standards like in Singapore.

“This will encourage the redevelopment of cities and older properties and will urbanise rural areas.” Source of info: malaymail.com

There’s no final percent which was mentioned yet but PM Anwar did mention Singapore as an example. So, between Hong Kong and Singapore, I think the model above on Singapore is likely to be more applicable to Malaysia.

Is majority always right? Whether 80 percent or 90 percent?

I disagree that majority is always right. In fact if majority is always right, then it would not be the minority who’s super rich. However, majority usually gets to make the decision though. Just as majority would think investing into a property is not wise. Anyway, whether it’s in the share market or governments or even a decision of where to go for holidays in a family the majority rules.

We will have to wait for more details. There are not enough details yet currently.

Happy reading!Property News Malaysia? Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER). 

Alternatively, Follow me on Telegram here.

Please LIKE kopiandproperty.com FB page to get daily updates about the property market beyond kopiandproperty.com articles.

Else, follow me on Twitter here.