The Valuation and Property Services Department (JPPH) has proposed for the government to set up a house price and cost control committee to monitor and provide recommendations relating to house pricing.

Director-General Nordin Daharom said the committee should be represented by the developers, Ministry of Housing and Local Government, Department of Lands and Mines, Construction Industry Development Board, state governments and JPPH itself.

“When we set up the committee, the related parties will discuss so that reasonable house prices could be recommended," he said after presenting the Property Market Report for First Half of 2018 in Kajang today.

He said among the factors that influenced house prices were demand, supply, premium payment, cost of building materials, wages of labour, and developers’ profit percentage.

He said some of the factors could be controlled and would subsequently able to provide more affordable house prices.

However, he said the committee would not only aim to control house prices but also play a role in negotiating with stakeholders to enable it to propose reasonable house pricing.

"While we adopt an open economy, the government supposedly should not play a controlling role.

“The government’s role is to give specific guidance so that industry players know the price level that can be purchased," he said.

Meanwhile, he said the nation’s property market recorded more than 149,800 transactions worth RM67.74 billion in the first half of this year, down 2.4 percent compared with the same period last year.

The residential sub-sector continued to propel the market, with a lion’s share of 62.8 percent, and constituted 46.7 percent of the transaction value.

"Nevertheless, this sub-sector recorded a slight decline in volume and value, at 0.8 percent and 3.6 percent respectively," he said.

Overhang issue

Nordin said the number of loan applications for residential properties fell by 3.1 per cent compared with the first half of last year while loan approvals dropped 0.2 percent.

"However, the situation is different for non-residential properties whereby loan applications and approvals saw an increase of 14.2 percent and 66 percent respectively, while the manufacturing sector registered lower growth of 4.9 percent in the second quarter of this year compared with six percent in the same period in 2017,” he said.

The growth in this sector was supported by the percentage rise in electronic component manufacturing, machinery, computer appliances and device equipment. The growth was also supported by the increase in transactions in the industrial property segment.

He said new launches declined 7.1 per cent to 37,723 units from 40,615 units in the same period last year and sales rate fell 19.2 percent from 22.4 percent before.

"The slow market absorption resulted in an increase in unsold residential properties to 29,227 units valued at RM17.24 billion, up 18.1 percent, while value rose 10.2 percent," he said.

He said the majority of overhang units were condominium and apartment priced between RM500,000 and RM1 million.

In the office segment, he said the occupancy rate exceeded 82.8 percent while the occupancy rate for retail was stable at 79.9 per cent.

Going forward, Nordin said the residential overhang and vacant commercial spaces were important issues that needed to be addressed by all parties including local authorities and developers.

“Both parties must conduct a study accordingly before undertaking new developments to avoid an oversupply situation,” he stressed. - Bernama