Efforts to curb property speculation

The government will initiate measures to address various issues gripping the property sector, including curbing rampant speculative activities in the market.

Housing and Local Government Minister Datuk Seri Chor Chee Heung said he would present to the cabinet findings of an industry meeting which could be used to come up with innovative ways to build affordable homes.

"The government has done fairly well in addressing the housing issues of the lower income. However, 40 per cent of the medium-income society still need accommodation.

"My ministry will use some of the findings to improve the sector," Chor told reporters here after opening a roundtable discussion on "Housing Affordability - Issues and Challenges".

The government will put forward recommendations, which will be based on proposals made by Real Estate and Housing Developers Association Malaysia (Rehda) such as on how to curb speculative property prices, financing, abandoned projects and sluggish developments.

Metro Kajang Holdings Bhd group managing director Datuk Eddy Chen Lok Loi said for example, a house built in Perlis cost RM250,000 but the same house using the very same materials but built in KLCC would cost RM1 million.

"This is caused by land cost due to two different locations. Nevertheless, there are some of the issues which Rehda will look into to address this such as materials prices. Working groups and a task force have been set up," said Chen.

Meanwhile, National House Buyers Association secretary general Chang Kim Loong said all parties, including the government and developers, need to launch proactive measures to stop steep price increases in the property market due to false demand and excessive speculation fuelled by easy mortgages and low real property gain tax.

"There is a huge mismatch between what the average household income can afford to buy compared to what is available in the market. A homeless generation will emerge and create various social problems," said Chang.

Chang said the average rakyat in a major urban area was struggling to buy his dream home where the average household with income of RM5,962 in 2009 would not be able to qualify for a 90 per cent loan over a 30-year period.

Assuming the average household income rises 15 per cent this year, the household may still not qualify for a 90 per cent loan in far areas such as Kajang, let alone in hot areas such as Kuala Lumpur.

He added that the government must also fine-tune the Bumiputera quota which has not made any headways.

"Don't get me wrong, we have no qualms over the discount for the first buy. But when you buy properties for the fourth and the fifth time and get up to 15 per cent discount ... that is wrong," said Chang. - By Zaidi Isham Ismail (Business Times)

6 comments

August 15, 2012 at 5:40 PMcondomana

Aiyo LGE, you should have done/said something first before the federal ministers. It looks like they are going to take the credit and you take the blame this time...:D

 
August 15, 2012 at 10:26 PMjeremy tan

I don't understand why we have to mix a certain class of assets with politics.

After all, talk is cheap.

 
August 16, 2012 at 6:03 PMcondomana

Hi jeremy tan,

To you, property is seen as an asset class. But to some, it is seen as a home for the family.

Democratic gov is elected to help the people run the country & manage it's resources so that the people's life will get better.

Combining the 2, home prices become political.

I agree with you, talk is cheap. What normally happens is a lot of talk, but in the end, ineffective policies are introduced...:)

 
August 16, 2012 at 11:11 PMjeremy tan

Fair enough statement : )

Solution: Raise interest rates substantially and prevent cheap money from flooding the market.

The most effective way to curb inflation but they will say it is going to hurt the economy and of course their profits and self interest.

It is made political by people: self interest + greed.

Who owns majority of the shares in these big developers? You and i know the answers

SP Setia: PNB 100%
E&O: Sime Darby 30% - soon to be 100% awaiting court order
IJM Land: Khazanah, EPF, PNB
MRCB: Khazanah, EPF, PNB
Dijaya: Vincent Tan's brother

Consumers on the other hand wants the best and pay the less. If you don't mind a home for the family at seberang prai or bukit mertajam, it is all within the affordability range.



 
August 16, 2012 at 11:17 PMjeremy tan

Not forgetting the banks that fuels the speculations

CIMB
MayBank
MBSB
Public Bank
HL Bank
BIMB

Majority share holders?
At the end of the day it is all about profits.

At the end of the day, they are just taking you guys for a ride. They have to say something to make the citizens happy and influence their voting decision. If you do an autopsy you will realize that the devil and angel is the same person. So, it doesn't matter to me what this minister says because i know its all just talk and talk is indeed cheap : )

 
October 29, 2012 at 10:56 PMcondomana

"......Non-local and corporate buyers will have to pay a 15 percent tax upon purchase, Financial Secretary John Tsang told reporters at a press conference on Oct. 26. The government also raised a resale tax on property by about 5 percentage points and extended the period during which it will apply to three years from two....."...Another round of anti-speculation measures targeted at foreign buyers introduced by Hong Kong.