KUALA LUMPUR, Nov. 21 (Xinhua) -- Malaysia's Second Finance Minister Johari Abdul Ghani reaffirmed Tuesday that Malaysian government has frozen the development of high-end properties costing 1 million ringgit (241,283 U.S. dollars) or above since Nov. 1.
"The decision was made by the cabinet, and it is applicable to all states. There is no U-turn in the decision," he told reporters on the sideline of the Malaysian Institute of Economic Research's (MIER's) National Economic Outlook conference 2018-19.
The timeline will depend on the housing situation in Malaysia, he added.
Johari reassured that the luxury property projects that had been approved earlier and under construction, would not be affected by the decision, and the developers are allowed to complete their projects.
He emphasized the decision is to safeguard the country's banking system as most property projects are undertaken via financing.
"If we don't regulate and control the property market, of what we have been advised by Bank Negara (Central Bank of Malaysia), we will face a problem in banking sector," he said.
He, however, believes the decision will not affect Malaysia's economic growth as the country is still supported by other infrastructure projects.
Last week, Johari said the cabinet had frozen the property developments priced above 1 million ringgit, to control the oversupply issue.
The announcement came after the Malaysian Central Bank warned that the unsold residential units in Malaysia had surged to a record high of 130,690 units in the first quarter, from 54,244 in the first quarter 2012. It also highlighted the issues of high office vacancy rates and oversupply of shopping complexes.
"The property imbalances pose significant risks to the overall economy in the event of a shock," said the bank's governor Muhammad Ibrahim last week.
