The Real Estate and Housing Developers’ Association Malaysia (Rehda) said such a move could cause the industry to collapse, affect the various related sectors, and in turn, impact the economy as well.

“Curtailing property investment will only result in a lower production of houses when our population is still growing. And when demand exceeds supply, it can lead to an increase in the price of homes, as well as rent, and may even cause homelessness,” it said in a statement.

Rehda president Ho Hon Sang said property purchases could help buyers hedge against inflation and preserve their wealth, while some buy homes as gifts for family members.

He added that there was a need to consider those who could not afford to buy their own property and instead rent from homeowners.

“Renters come in all shapes and forms – other than financing issues, there are also people who lead nomadic lives, those who move along with their jobs, and those who simply do not intend to invest in homes and would rather invest or spend elsewhere.

“For these groups, renting is the answer,” he said.

Instead of limiting property investments, Ho said Putrajaya should instead give developers incentives to build more houses “at the correct locations”.

He believed the prices of homes would remain competitive in a well-served market, benefiting the general population.

Former Umno leaders Khairy Jamaluddin and Shahril Hamdan had proposed limiting property investments, saying this could make houses more affordable.

Real estate negotiator Iwin Tay said the cap would help to stabilise property prices and ease demand pressures on the housing market, especially in areas with a limited supply, such as Kuala Lumpur.

However, housing and local government minister Nga Kor Ming said such a move could destabilise the property market and lead to a chain reaction affecting the economy.