House prices up in selected areas only

The Real Estate and Housing Developers’ Association Malaysia (Rehda)’s immediate past president Datuk Ng Seing Liong has ruled out that house prices are increasing by double digits.

Reports of rising property prices are not reflective of the entire market situation as prices are increasing only in selected areas due to strong liquidity in the market, scarcity of land, and a mismatch between demand and supply, Ng said.

There is an increase in labour and construction costs but it is minimal and not reflected in existing housing projects.

“Construction cost has increased by between one and three per cent recently, but it is still negligible.

“The key here is a mismatch between demand and supply which is causing house prices to increase in some locations,” he said.

Ng was speaking to Business Times here yesterday after a briefing on the Malaysia Property Exposition (Mapex), which will be held at the Mid Valley Exhibition Centre from October 25 to 27.

Ng said there is strong demand for gated communities and the more affluent groups are willing to pay higher prices for such properties.

“Properties in gated communities can cost between 30 and 50 per cent more than basic houses because of value-added privileges.

This is where, I believe, there is a misconception that property prices are increasing,” he said. - By Sharen Kaur (Business Times)

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