PETALING JAYA: Implementing house price controls could assist developers to fix appropriate prices for their products in less-developed states and locations, said National House Buyers Association (HBA) secretary-general Datuk Chang Kim Loong.
He was commenting on an announcement by the Housing and Local Government Ministry that it is developing an Affordable Housing Price Index for different locations nationwide to guide developers, prospective buyers and local authorities to determine the appropriate price of affordable housing.
Its minister Datuk Seri Reezal Merican Naina Merican said the index should be developed as different states and localities have different standards or definitions of affordable housing.
However, Chang told theSun that while HBA agrees that affordable housing should be priced cheaper in states such as Kedah compared with the Klang Valley, it believes the current cap of RM120,000 to RM300,000 for a three-room unit with a built-up area of at least 79sq m near transport facilities and amenities should be maintained.
“Bank Negara Malaysia has said median property prices in Malaysia are now above the affordability of the people’s median income. This index could potentially assist developers in pricing their products in less-developed states or locations to overcome the mismatch between buyers’ affordability and developers’ selling prices, which has resulted in a huge overhang of some 36,863 completed properties as of last December.
“However, our concern is that developers may use selective statistics to increase the price cap on affordable housing, which means the minister may be swayed to increase the price in uptown areas, such as Ara Damansara in Petaling Jaya, to more than its defined RM300,000, to the developers’ definition of affordable housing, which is RM500,000.
“It would be incorrect to conclude that just because the median income in Petaling Jaya is higher than Kota Baru in Kelantan, the cap for affordable housing in Petaling Jaya should be revised upwards.”
Chang pointed out that a person who purchases a property in Petaling Jaya does not necessarily live or work in the city or earn the same median income as those who do.
“Hence, HBA believes the current RM300,000 cap of affordable housing should be maintained even if the ministry launches its Affordable Housing Price Index.”
He said the proposed index should also consider the cost of living in the respective locations to establish net incomes for buying properties.
Chang added that the proposed index seems to duplicate the work of the Statistics Department, which regularly conducts the household income and expenditure survey, with the last report published in 2019.
“We are sure the housing minister has good intentions in proposing the housing index. But we hope he will not be misled by developers just so the affordable housing cap is raised above the current threshold of RM300,000.”
