Property Hunter Magazine October Issue 2014 | Page 36

/// East Malaysia Property News

‘Limit’ Ruling Ineffective on Bulk Property Buys
According to him, the market has
slowed down considerably with developers’ sales falling 50% so far this
year. In Sabah, the Sabah Housing
and Real Estate Developers Association (SHAREDA) announced a 65%
drop in sales.
“The romance has left the group
buying clubs because it only works
in a rising market…the lure of group
purchase is not so much there anymore,” he said.
However, he said this is not the
result of the ruling on bulk buying
as none of the developers have registered or submitted names of purchasers to the Controller of Housing
for bulk buying.
“I don’t blame them because there
has been no official document from
the ministry since the announcement,” he said.
Shanker said the drop in property
sales in the first half of the year was
due to the general perception of a
slow down in the economy.

Siva Shanker, the president of the Malaysian Institute of Estate Agents (MIEA)

The four-unit limit ruling on bulk
property purchases has not made
any impact on the residential
property market and could be detrimental to the investment market,
said the Malaysian Institute of Estate Agents (MIEA) president Siva
Shanker.
“The ruling does not work with
group sales because in group sales,
each person buys one unit. The
ministry has got it all wrong. Group
buying and bulk buying are different.
Bulk purchasers are actual investors
who have capital and buy several
units for investment whereas group
purchasers are a group of say, 200
individuals who buy one unit each
for the purpose of flipping the units,”
he told SunBiz in an interview.
He said the ruling was the wrong
policy in the first place and was not
thought through properly prior to
implementation. It also punishes
genuine investors instead of ad-

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dressing the issue of runaway prices
caused by speculative buying.
The limit on bulk purchase was
first mentioned in February when
Urban Wellbeing, Housing and Local Government Minister Datuk
Abdul Rahman Dahlan said that the
government is considering ways to
restrict bulk buying of properties by
investor clubs.
As part of an effort to curb speculative buying of properties by investor
clubs, which is one of the causes of
runaway prices of properties in the
Klang Valley, Abdul Rahman said
developers who intend to sell more
than four units to a purchaser must
obtain prior approval from the Controller of Housing.
“In my opinion, there should be
an outright ban on investor clubs,
or the clubs should be regulated.
But an outright ban is better,” said
Shanker.

“The outlook on the property market
is still gloomy. In the first half, transactions fell but values are staying or
going up…between 2011 and 2013,
the market rose too high, too fast
and too quickly. Now the market is
screeching to a halt,” he said.
He said talk of a property bubble,
property prices rising and responsible lending guidelines have created
a negative market perception, which
has slowed down the market but
values are still “grossly inflated”.
“The market is in a tailspin and it
has yet to recover. The slow down
will reduce in the second half of this
year and remain flattish next year
before picking up again in 2016.”
National House Buyers Association
(HBA) secretary-general Chang Kim
Loong concurs, adding that the ruling, which was implemented in May,
has not resulted in any improvements in the residential property
market.

industry players and stakeholders
despite various reports on the new
ruling published in the media.
“The ruling also states that each
buyer is allowed to buy up to four
properties per development. This
means that speculative buyers can
still use their relatives’ names to buy
more than four residential properties. There are too many loopholes
with this ruling,” he said.
He reiterated his opinion that investor clubs should be outlawed and
there should be regulation on the
formation of such clubs. He also
urged the government to investigate
developers “who are speculators
themselves”.
“Some developers set up their own
companies and buy the properties
themselves, after which they claim
that the project has been sold out,”
he said, adding that prices rise considerably in the secondary market
after that.
“Is it in