Malaysia has suspended approvals for new high-end and luxury condo developments with individual units selling at more than RM 1 million (THB 7.88 million) each.
The move has been justified by the government as an attempt tp control the national oversupply of homes and prevent it from adversely affecting the economy.
Second Finance Minister Johari Abdul Ghani told the media the Malaysian Cabinet decided to suspend approvals after a detailed Malaysian central bank report on the real estate glut.
He noted there was an overflow of luxury projects which had outstripped market demand for affordable homes.
“The report takes into account high-rise condominiums, shopping malls and commercial units, including those that are worth more than RM1 million (S$326,000).”
This will be temporary until we can clear all the the excess supply, he added.
The government will continue to push the development of affordable homes, specifically those priced at less than RM300,000 a unit (THB 2.36 million ).
“In this sector, there is a disparity between the 48 percent demand for affordable homes and the supply that only meets 28 percent of that. This is the area that needs to be addressed swiftly,” he said.
What would be the impact on Thailand if there was an across-the-board halt to new luxury and super-luxury developments?
New condos with a price tag of THB 7.88 million each are not that unusual.
Can you see Thailand following Malaysia’s example, given there is a certain amount of oversupply in large pockets of Bangkok at the moment?