KUALA LUMPUR: A protracted period of supply overhang from the government’s frozen of approvals for luxury property development projects will push down property prices as market valuation adjusts to reflect the lack of demand, Moody’s Investors Service said. The government had since November 1 frozen approvals of luxury property developments such as shopping malls, commercial complexes and condominiums priced above RM1 million to address oversupply in the market. The freeze followed Bank Negara Malaysia’s report earlier this month that suggests the oversupply in Malaysia’s property market is worsening. Citing Bank Negara data, Moody’s said the banking system’s total loan exposures to property segments with acute oversupply accounted for eight per cent of total bank lending. “Furthermore, we believe that suspending new property development will not correct the oversupply situation over the next five years, when property projects now in development enter the market,” it added.

Source: New Strait Times November 27, 2017 11:15 UTC