Home > News > Nation
Tuesday October 8, 2013 MYT 2:04:00 PM
Tuesday October 8, 2013 MYT 2:06:54 PM
KUALA LUMPUR: The escalating price of houses have left many Malaysians scratching their heads about how they are going to get a home they can afford.
Despite the government's various measures like constructing more affordable homes under the 'Perumahan Rakyat 1Malaysia' (1Malaysia People's Housing) programme or PR1MA, the high cost of owning a roof over the head is still a major obstacle for many.
Among those who share this concern are the younger generation, especially the medium-income earners, including newlyweds, looking for houses of their own.
Will home prices go down?
Can the price of houses come down or can more affordable homes be made available in the market?
These are the two most common prevailing anticipation among the middle-income group who wish to have homes to call their own.
Universiti Sains Malaysia (USM) academician Professor Madya Abdul Aziz Hussin tells Bernama that, first and foremost, potential buyers should learn of the actual costs incurred in owning a home.
The total expenses involved in building a house cover the cost of construction materials, labour, land and legal aspects as well as that of finance.
And the cost of construction and ownership rises due to the escalating costs of any one or all of the aforementioned aspects, not to mention the supply and demand factor, and the local and global economic circumstances.
On the supply side, Abdul Aziz notes that even though the government is responsible for building homes it does not build the houses.
The houses are instead constructed by profit-oriented developers.
Is there a way to control the escalating price of houses?
Abdul Aziz's study reveals that land is the major cost component in the price of a house, particularly in the urban areas, therefore curtailing the land price increase could help to cap the house prices.
"The construction costs can be reduced if the government (federal and state) has a list of contractors who can offer affordable homes with the latest designs as well as with minimal construction faults," he says.
Nonetheless, the quality of these houses should never be compromised through poor quality material of shoddy workmanship due to the cost cutting measures.
Other factors that can bring down the price of houses are lower statutory charges, apart from lower fees for architects, quantity surveyors and engineers among others.
Another factor that can make homes affordable is the urbanisation of the rural areas.
Keeping speculators at bay
He also stresses that the activity of real estate speculators should be curtailed.
According to the academician, the speculators have created a cartel by buying in bulk and disposing them later at higher prices.
"The existing real property gain tax (RPGT) should be fine tuned with higher taxes for properties disposed within a short time frame and it is one way of curtailing such speculative activity.
"Also, at present by paying a deposit one is considered to have purchased the property and this should be reviewed because many speculators make hefty profits by disposing them after paying the deposit," he explains.
Limit the numbers of homes one person can own
He says at the moment there is no limit on the number of houses purchased by one person in a single project as well as no scrutiny on who the buyer is.
"To the extent that claims have surfaced about that the developers themselves are working hands in glove with the speculators to create an artificial demand to push up prices," he says.
Can the government consider giving subsidies to help the 'rakyat' buy their own homes?
"Subsidies are seen as not practical in this aspect and already the government is forking out various subsidies to help people meet the rising living costs.
"Furthermore the purchase of real estate is a form of long-term investment and buyers should be prepared to accept houses that they can afford though they may have to compromise on their dream house," he adds. - Bernama
Copyright © 1995-2013 Star Publications (M) Bhd (Co No 10894-D)