The government‘s property cooling measures and cross-subsidisation policy is not good for the property sector, with the affordable housing segment suffering the most, according to Real Estate and Housing Developers’ Association of Malaysia(Rehda).
“Property speculation is in hotspots, not among the affordable housing community, but if the Government continues to have tightening measures, then it could affect 95 percent of the market,” said Rehda president Datuk Seri Michael Yam.
“We need to examine carefully the various categories of buyers and speculators and prescribe a more focused action plan against the right people,” he added, noting that the government’s broad brush-stroke approach had unjustly affected other asset classes.
In concurring, past president Datuk Ng Seing Liong noted that reports of property price hikes is not reflective of the entire market since prices are increasing only in certain hotspots.
“Price hikes in these hotspots were reflected in the media and then caught by house buyer associations, which started asking the Government to clamp down on property speculation via the RPGT and other tightening measures,” he explained.
“Remember, these people are buying into a lifestyle, and hence, the price has to go up.”
In fact, prices of basic houses are still “reasonable” and the secondary market still has ample supply. “The choice is still with the buyer, they should not just claim that prices keep going up,” he added.
Meanwhile, Yam also attributed the skyrocketing house prices to cross-subsidisation.
“The low-cost subsidised housing is sold for RM42,000 when the building cost is RM100,000. So, who is paying the difference? The subsidy is passed through to other housing categories and subsequently, those who buy in these other categories…Thus, prices have gone up,” said Yam.
To solve this issue, the government should focus on affordable housing as it can be built without the developers suffering any loss.
“Now that low-cost housing is no longer required, the Government should focus on affordable housing, be it through the 1Malaysia Housing Programme, or PR1MA, or even developers,” he added.