The two incentives announced by the Johor government in its 2020 Budget to curb the glut in the property market cannot be seen as signals to developers to continue building luxury homes in the state.
Instead, the move taken by the state government is in line with the federal government’s action by adding stringent conditions, State Housing, Communications and Multimedia Committee chairman Dzulkefly Ahmad said.
“We do not want the move to introduce the two incentives as expounded by the Menteri Besar (Dr Sahruddin Jamal) during the 2020 Budget presentation is misconstrued as giving the wrong signal to developers to continue building luxury homes.
“And when a glut occurs, the state government will conduct a bail-out. This is not the intention of the state government, ” he told reporters outside the Johor State Assembly sitting after the budget presentation in Kota Iskandar yesterday.
Dzulkefly said the oversupply of properties occurred due to a mismatch of supply and demand in the housing market.
“(But) we are talking about a relatively large amount of unsold properties worth RM30 billion, that's a huge amount.
“Let’s see how we can liquidate RM30 billion ... at least one-third of that, so that the money will circulate in the economy and eventually create jobs," he added.
According to the National Property Information Centre (NAPIC), there are 46,539 units of unsold properties worth RM30.729 billion in Johor as at June 2019.
The total unsold units are made up of three categories: completed units and issued Certificates of Completion and Compliance (CCC); units under construction; and units in the process of obtaining planning approval.
Of the 46,539 unsold units, 36.9 percent or 17,194 units are residential units while the rest are commercial and industrial units.
In his budget presentation, Sahruddin announced two incentives to curb the oversupply of properties in Johor, firstly, by lowering the minimum price of real estate that foreigners could buy from RM1 million previously to RM600,000.
The incentive is only offered for multi-storey properties such as apartments, condominiums, serviced apartments, and small office home office (Soho).
Secondly, the release of residential units reserved for bumiputera priced RM700,000 and above.
For the first-time release rate application, it is increased from 30 percent to 60 percent while the second-time release rate application it is raised from 30 percent to all remaining units.