Following a meeting with DBKL Mayor Tan Sri Mohamad Amin Nordin, my colleagues from Parliament revealed yesterday that DBKL would not be enacting the announced freeze on high-rise property developments above RM1 million. According to Segambut MP Lim Lip Eng, DBKL Mayor said that the ban would not be implemented in the Golden Triangle as it would infeasible.
City Hall’s response confirms two glaring flaws in the government’s ‘hare-brained’ solution to the oversupply of luxury properties in the country. Firstly, as I’ve stated before, it shows how ill-thought out and impractical the ban actually is.
Secondly and more importantly, DBKL’s defiance of a Cabinet directive demonstrates just how toothless Putrajaya’s is. Ironically the BNM report specifically highlighted that in Kuala Lumpur and the Klang Valley alone, the report found that office vacancy rates had increased from 20.9% in Q1 2015 to 23.6% in Q1 2017. The situation is only set to get worse with an incoming supply of additional 38 million square feet of office space.
The property freeze was first announced on November 17 by Second Finance Minister Datuk Johari Abdul Ghani following the release of Bank Negara’s (BNM) report on the severe supply and demand imbalance in the country’s property market. The freeze was supposedly a nationwide blanket ban which would freeze approvals on condominium, office and shopping mall developments valued above RM1 million per unit.
The announcement quickly became a farce when the Works Minister Datuk Fadillah Yusof contradicted his cabinet colleague by saying the ‘blanket ban’ would actually be applied on a case by case basis. The Federal Territories Minister Dato’ Seri Tengku Adnan Tengku Mansor then added that 1MDB-linked projects - Tun Razak Exchange and Bandar Malaysia would be exempted from the ban because they were ‘pre-approved’.
Finally, cabinet made a full u-turn last week when it said that developers could appeal the ban to a Ministerial committee comprising the Second Finance Minister, the Works Minister, Urban Wellbeing and Local Government Minister Tan Sri Noh Omar, and Minister in the Prime Minister’s Department Datuk Abdul Rahman Dahlan.
However, yesterday’s revelation by the DBKL Mayor proved that all these acrobatics are unnecessary since any decision by the Cabinet is utterly futile. If DBKL can do it, then there’s no reason why all other local councils in the country would comply with the directive.
The above further showed why we have reached such a state of severe “demand and supply imbalance” in the first place despite warnings from BNM since 2015. It is precisely because of the Cabinet’s impotence, that whatever policy that has been decided upon – good or bad, are completely diulted, if not ignored altogether like the above, by the its implementation agencies.
Beyond the major policy decisions Putrajaya needs to make to remedy the increasingly severe property sector problems which will have far-reaching consequences for our economy, there is a clear need to overhaul the Government bureaucracy to ensure policies made are carried out to the letter. Otherwise, you may have the world’s best policy-makers and the highest paid consultants, but all would be wasted with a Government effectively run by politically entrenched warlords and little Napoleons.