A Malaysian industry expert and analysts believe that prohibiting pre-launch sales of residential units will not address the excessive speculation in the market.
Earlier this week Minister in the Malaysia’s Prime Minister’s Department, Datuk Seri
Abdul Wahid Omar, said pre-launch sales by developers should be stopped
in order to curb speculation, which has caused home prices to increase.
“There is definitely some elements of manipulation or speculation during Malaysian pre-launch sales. Whether you have pre-launch sales or official launches, the same thing is going to happen,” said Previndran Singhe, Founder and Chief Executive Officer of Zerin Properties.
“But to put a blanket on this, I think, is not right. I believe Malaysia property developers have prelaunch sales to test the market.”
On the other hand, Previndran believes that the situation can only be addressed if an efficiently managed supply and delivery system is put in place.
“Developers should get approvals in 30 days, instead of six to eight months, to reduce their holding cost. There is also a lot of charges and inefficiencies. These issues must be addressed first before talking about other issues. All the costs are passed on to buyers and naturally house prices will increase,” he explained.
Meanwhile, Edmund Tham, research head at Mercury Securities, said the concept of pre-launch sales will not be easy for the government to enforce or regulate.
“There is no ban yet, so pre-launch sales of Malaysia property will still go on. I don’t think pre-launch sales equal speculative buy,” he added.
Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email farahwahida@propertyguru.com.my
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