House prices have dropped after measures were put in place to check rising property prices due to speculation, says Datuk Chua Tee Yong.
The Deputy Finance Minister said data from the National Property Information Centre (NAPIC) showed that there was a drop in house prices with the market slowing down from 12.2% in the third quarter of 2013 to 4.6% in the same period last year.
“The drop is a result of various measures taken by the Government,” he told reporters at the Malaysian Real Estate Convention 2015.
“This is important. While all markets have speculators, excessive speculating will result in extreme price increases.”
Among measures taken to curb speculative activity included raising the real property gains tax, imposing 70% loan-to-value on housing facilities for the third property and abolishing the developer interest bearing scheme.
“The Government has also raised the ceiling price of properties that can be purchased by non-residents – from RM500,000 to RM1mil – and this has helped as well,” he said.
Chua said the other significant move was the supply of low-cost and affordable housing through various schemes and initiatives.
Malaysian Institute of Estate Agents president Siva Shanker said that while affordable housing was good, more focus should be given to properties priced between RM150,000 and RM250,000.
“Currently, affordable housing is priced between RM350,000 and RM450,000, and perhaps this is inaccurate,” he said.
“To me, it is impossible for someone who earns RM3,000 to afford a property worth RM400,000. Even if his wife earns an additional RM3,000, he would still only be able to afford a house worth RM150,000,” Siva said.
He said more focus should be given to building houses worth between RM150,000 and RM250,000.
“There is a large group waiting to buy properties in this price range.” - By The Star