Publication: NST
Date of publication: Sep 12, 2013
Section heading: Main Section
Page number: 018
Byline / Author: By R.C.W
I REFER to the recent remark by the president of the Real Estate and Housing Developers' Association (Rehda) that property prices can be expected to rise by 10 per cent following the increase in petrol prices.
How did he arrive at the figure when the Housing and Local Government Ministry is of the view that any rise in prices should be no more than three per cent?
While we can understand that there will likely be a general increase in the cost of goods and services, one cannot simply generalise and make a statement that property prices will rise by a whopping 10 per cent, unless a proper study is carried out to ascertain what will go up in prices and by how much.
It seems to me that it is becoming a trend that whenever there is a change in fuel prices, Redha will issue a message to the public that material prices will go up and therefore property prices.
I recalled that Rehda made a similar remark a few years ago when the government raised fuel prices.
It is simple economics that everyone knows that prices of goods and services in general will rise whenever there is a hike in fuel, but a person of his standing in the housing industry should be more responsible by not generalising the future price of properties, unless he has carried out a detailed study and there is evidence to support the rise by that margin.
No doubt, Rehda has a duty to protect its members but it also has a duty to make responsible statements to the public.
While, on the one hand, the government is concerned over the galloping house prices in the the last few years and looking at new budgetary measures on how to curb speculation and excessive rise in property prices, here we have someone making an announcement that property prices will rise substantially, just because there is a hike in fuel prices.
Rehda should do more to help the government and the public to manage property prices while ensuring its members continue to earn a reasonable profit.
It is a fact that developers in general are already raking in huge profits over the last few years and will continue to do so.
On top of this, even with the impending goods and services tax (GST), they will pass this burden on to buyers at the end of the day but it certainly does not give them a "licence" to increase prices automatically by a large margin.
Currently, there is no price control on properties or building materials and, therefore, buyers have no choice but to pay for whatever quoted by the developers.
In some cases, buyers not only have to pay high prices but also end up getting shoddy workmanship and materials.
The government should consider setting up a body to monitor any increase in property prices by developers, some of which have contributed to higher prices.
R.C.W, Kuala Lumpur
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