Finance Minister II Johari Abdul Ghani said there was no "U-turn" in cabinet's decision to freeze new high-end property development in Kuala Lumpur.

"All projects that have received approvals can proceed. This freeze is only for new shopping malls, offices and high-rise residential units priced above RM1 million.

"There is no U-turn," Johari told Malaysiakini.

He was responding to several news reports which quoted Works Minister Fadillah Yusof claiming that despite the freeze, there will be some leeway for some high-end projects on a case-by-case basis.

Both the NST and The Edge Markets quoted Fadillah saying that "this is not a blanket stop order". 

Johari said he has spoken to Fadillah and the latter said he was misquoted by the press. 

"He was wrongly quoted. He told me just now that what he said is existing projects that have been approved can proceed," said Johari.

No leeway, or not?

Earlier press reports appear to suggest that there were conflicting statements from cabinet members regarding cabinet's instruction to the Kuala Lumpur City Hall (DBKL) to put the brakes on new high-end property development.

Fadillah was quoted by The Edge Markets as saying that cabinet's decision was to "send a message" to developers.

"The government is (instead) sending a message to developers to study whether there will be (sufficient demand for a project) before they decide (to proceed).

"If you sell an RM1 million condominium located in (unattractive) areas, it may not attract buyers. But if you sell RM4 million condominiums around the Kuala Lumpur Convention Centre (KLCC) area, you will definitely get buyers, especially among expatriates," Fadillah said, according to The Edge Markets yesterday.

Like Fadillah, Federal Territories Minister Tengku Adnan Tengku Mansor had suggested that there may be some leeway for certain projects, despite the cabinet's decision.

"If these are new areas and we can disperse it (the development) out of the city centre, we can look into it," Tengku Adnan said, according to The Edge Markets.

On Sunday, Johari said the cabinet's instruction would be in place until "all" excess supply is cleared.

"There is a stark imbalance between supply and demand and we have to review the strategy in terms of real estate development as we do not want such situation to adversely affect the economy," he said.

What about Bandar Malaysia, TRX?

Tengku Adnan said cabinet made the decision two or three weeks ago, after receiving advice from Bank Negara Malaysia (BNM).

The central bank's quarterly bulletin had said unsold residential properties in the country were at a decade high and nearly one in four offices built in the Klang Valley were vacant.

If this trajectory were to be continued, the central bank projected that one in three offices in the Klang Valley would be vacant by 2021.

However, most of the empty residential units and commercial space are located in Johor, followed by the Klang Valley.

There is no indication that the cabinet's new ruling would affect Putrajaya-backed projects in the Kuala Lumpur, such as Bandar Malaysia, Tun Razak Exchange (TRX) and Permodalan Nasional Bhd's Merdeka PNB 118.

In the case of Bandar Malaysia and TRX, Tengku Adnan said the master plan had already been approved.

Bandar Malaysia and TRX will add an immense number of high-end properties into the market upon completion. However, all parcels for these Finance Ministry-owned projects have now been sold.

Merdeka PNB 118, which is already under construction, will add 4.3 million sq ft of commercial and office space upon completion in 2024.