KUALA LUMPUR: The Government has implemented a measure to control bulk sales of property to try and curb the proliferation of “property clubs” that have been walking away with handsome profits, especially in the Klang Valley.
Minister of Urban Wellbeing, Housing and Local Government Datuk Abdul Rahman Dahlan said developers selling more than four units of their properties to a single buyer or group must now obtain prior approval from the Controller of Housing.
The move is likely to affect the activities of these property clubs which normally enter into a tacit agreement with the developers to take up a large portion of their units before the launch of a project.
Because the property club buys in bulk, it gets a steep discount and pays a smaller down-payment compared to an individual house buyer.
The benefits accrued are then passed on to its members.
When the project nears completion members divest their property at a much higher price.
Speaking after launching Sime Darby Property’s housing income index, Rahman said bulk buying was not against the law but it created a false demand causing unnatural price spikes.
“The new condition would palliate those effects. I will call for a meeting with the Real Estate and Housing Developers’ Association of Malaysia (Rehda) stakeholders in a month’s time,” he said.
Abdul Rahman also said the new enforcement would be made compulsory in all real-estate advertising and sale permit materials.
The existence of property curbs came to light last year when developers announced huge take-ups in the first days of a project launch, causing an artificial demand.
This resulted in unsuspecting house buyers rushing to take up the remaining units, also causing a spike in property prices.
In a related development, Abdul Rahman said the Government may increase its RM300mil allocation for the MyHome scheme which will be launched on April 1.
The scheme will subsidise the purchase of low-cost houses by first-time buyers who earn less than RM3,000 a month.