NGO proposes house price control, but developers disagree
National House Buyers Association (HBA) vice-president Goh Seng Toh has suggested that the government should introduce a price control mechanism for residential properties to resolve housing woes.
"We agree that lots of factors have influenced the price of houses in the country, namely compliance cost, material cost and labour cost," he said...
National House Buyers Association (HBA) vice-president Goh Seng Toh has suggested that the government should introduce a price control mechanism for residential properties to resolve housing woes.
"We agree that lots of factors have influenced the price of houses in the country, namely compliance cost, material cost and labour cost," he said.
He then took the housing developers to the task, claiming they are the cause for the high price of houses.
"Some developers have adopted what we call 'teh tarik syndrome'. When the price of steel bar goes up by 10 percent, the house price will also go up by 10 percent, which is wrong.
"The house is made of all kinds of materials, so they cannot adopt this 'teh tarik syndrome'," he told a panel discussion on housing policy.
"We have deliberated on the subject of price control. We are very stringent when controlling the prices of cooking oil and sugar, yet in the housing market, we allow the developers to call the shots.
"Basically, the developers will decide the house prices and how much profit they will make."
According to Goh, the price control mechanism can be done if all parties are serious, while advice on it can be obtained from quantity surveyors, valuers and architects.
Another panellist, Suraya Ismail, a director of research at Khazanah Research Institute, said the Malacca government had intervened when it noticed the rapid change in house prices, to ensure they are affordable.
'We are not socialist'
However, Real Estate and Housing Developers Association Malaysia president Soam Heng Choon, also a speaker in the panel discussion, disagreed with Goh.
"We need to be very careful here. The government is a socialist or a capitalist? We are not socialist. We need to let the free market work," he said.
Soam said the government had introduced subsidy mechanism in the housing industry by providing a bumiputera quota and affordable houses.
"No other industry, not even the automotive industry, does that," he said, adding that the housing industry is already heavily regulated.
"The government should not be involved in business. The government should not be involved in building houses, except for social housing. The rest should be left to the developers."
National Housing Department director-general N Jayaselan, who was present as a speaker, said the government had no plans to impose price controls on the housing sector as it would impact the country's international ratings.
"So we need to see the issue in a holistic manner because the housing and construction industries affect the country's GDP (gross domestic product)," he said.
What was being done in Melaka was not intervention by the state government but an "assessment" before setting house prices.
"This was allowed because it is not price controls. It provides the right price," he said.
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