Let’s reiterate this. Cooling measures are not meant to reduce property prices. It’s meant to cool prices meaning to stop prices from going up faster than what it should. Nope, property prices definitely cannot stay stagnant forever. Else, within a few years, all the developers would have to close shop because costs are rising while the price they could sell is the same every year? And for buyers of properties, if the property they bought today does not change in price at all until they retire, we are actually ‘killing’ them because it meant that they were buying into something which depreciates due to inflation. Let’s not forget that when they have finished paying for the home, the interest payment would have been 1.5 to 2 times of the property price! So, briefly, property prices have to rise but let’s slow them down.. Now for some things which we could do in order to make property prices more attractive.
Article in propertyhunter.com.my Kuching Sarawak Housing and Real Estate Developer Association (Sheda) chairman Sim Kiang Chiok said, “New property prices are determined or based on various costs. The major ones are land, compliance, construction costs and margin the developer would expect for himself to put his capital, time and effort into the development.” He also shared that some proposals have been delivered to the government on ways to reduce the cost of building homes.
For example, for the government to increase infrastructure such as roads to open more land for housing to increase supply of land, increasing the number of houses allowed to be built per acre of land, increasing land supply by allowing automatic conversion from native land to mixed zone within 20km radius of cities and 10km within of towns in Sarawak.
He added, “Also reduce compliance costs by reducing the approval time for planning layout, building plan, engineering plan, developer licence, advertising permit, road certification, occupation permit. Allow self-certification by consulting architect/engineer of the development to certify road certificates, occupation permit as in West Malaysia Certification of Completion and Compliance or CCC in short.”
He also said that there are a few basic materials where price increase will add to the cost as there are no substitutes. He hoped that these basic materials such as steel and cement would not increase too much and too quickly so that developers could continue to build houses at an affordable price for all. Article in propertyhunter.com.my
We can see that even Sheda understands that prices of materials will have to go up. He just hope that it does not go up too much and too quickly. This is exactly the same for property prices! And KL / Selangor property prices too. Too much, too quickly meant the bubble is forming and may just burst as soon as majority could no longer afford even the ‘affordable’ properties which are built for the people. Let’s not have that situation happening yeah. As we continue to manage the property price increase so that it’s slower than 2009 – 1012 period, the government will also have to ensure that they get more investments into Malaysia which could create high-paying jobs too. If the jobs we do are of the lower end and the salaries continue to be low, then of course even affordable homes look like expensive ones. Happy following.
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