KOTA KINABALU: A tug of war is going on between state authorities and Sabah developers over an order for them to reduce housing prices by 10%.
The state Housing Controller, through the Local Government and Housing Ministry deputy permanent secretary Rayman Loudrize, told developers to reduce the prices of their new projects. Failure to comply with this would result in their housing development licence, advertising permits and price list applications not being approved.
State Local Government and Housing Minister Datuk Hajiji Noor said the order was initiated because there had been cases where the selling prices of houses in Sabah exceeded the agreed 30% profit margin.
He said the state government’s responsibility was to the rakyat, who are finding it increasingly difficult to own houses due to high costs.
Sabah Housing and Real Estate Developers Association president Datuk Francis Goh said the 10% reduction was unreasonable as developers were already complying with the 30% cap in profit margin. He said the order, issued last month, would only discourage developers from launching new projects.
He said although the 30% profit margin was not a written rule, Sabah developers had always worked with quantity surveyors to ensure that proposed selling prices did not exceed that figure.
Goh said developers felt they had no choice but to turn to the courts and seek a judicial review on the Housing Controller’s order.