Real estate news in Malaysia

Malaysia successfully revived over 660 abandoned housing projects

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The Task Force on Sick and Abandoned Private Housing Projects (TFST), established by the Ministry of Housing and Local Government (KPKT), has made significant progress in resolving stalled housing developments across Malaysia. In less than two years, the TFST has successfully revived 663 housing projects, benefiting 78,554 buyers and representing a gross development value (GDV) of RM 57.09 billion ($11.99 billion). This initiative is a major step toward restoring confidence in the Malaysian real estate market and ensuring that property buyers are not left stranded.

Completed projects in 2023 and 2024

In 2023, the TFST completed 452 sick and abandoned housing projects, comprising 53,697 units with a GDV of RM 39.81 billion ($8.36 billion). By May 31, 2024, an additional 211 projects had been revived, involving 24,857 units with a GDV of RM 17.28 billion ($3.63 billion). These numbers emphasize the government’s dedication to addressing the problem of abandoned housing projects and offering vital assistance to affected buyers.

Property owners and buyers welcome this development, as it promises the completion of long-awaited housing projects and the stabilization of property values. It also reflects the government’s proactive approach to ensuring the health and stability of the real estate market.

Ministry’s assistance and monitoring

The KPKT is not only focused on reviving abandoned projects but also on preventing future occurrences. The ministry conducts regular monitoring and field visits to project sites, engages with technical agencies and local authorities, and identifies preventive measures or more focused solutions with developers. This comprehensive approach ensures that potential issues are addressed early, reducing the risk of projects becoming ‘sick’ or abandoned.

Furthermore, the ministry is contemplating restructuring loan payments for buyers impacted by government housing projects, including Residensi Wilayah, PR1MA, and the Civil Servant Housing Programme (PPAM). This assistance is vital for buyers who have put their savings and aspirations into these projects, offering them financial relief and the opportunity to ultimately own their homes.

Legislative amendments and developer accountability

The Ministry of Housing and Local Government (KPKT) is amending the Housing Development (Control and Licensing) Act 1966 to provide greater protection for property buyers. The amendment is aimed at prosecuting developers engaged in fraudulent activities or those who abandon projects. Developers found guilty may also be barred from leaving the country. These measures are designed to hold developers accountable and discourage them from participating in unethical practices.

These legislative changes are especially important for foreign investors and property buyers. They suggest a more regulated and secure real estate environment, which makes Malaysia an attractive destination for property investments. The assurance that developers will be held accountable reduces the risks associated with purchasing property in the country.

Ministry takes proactive measures for ongoing and future projects

To avoid future delays and ensure the success of new projects, especially PR1MA projects, the ministry has taken proactive measures. These measures include conducting feasibility studies for all new projects and terminating contracts with contractors who have a poor track record or attempt to exploit the situation. Minister Nga Kor Ming expressed confidence that all 24 ‘sick’ PR1MA projects will be completed by the end of the year.

The following changes will enhance the Malaysian real estate market, offering greater security and confidence to property buyers. These developments indicate a more dependable and stable market for those interested in investing in Malaysian real estate, with the government working proactively to safeguard buyers’ interests and ensure the successful completion of housing projects.

Written by Matt Timmermans

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