Thursday, May 5, 2011
Interesting News - Unholy Alliance
Curb rising cost of houses — National House Buyers Association
May 04, 2011MAY 4 — Prices of Properties, in particular Landed Property, have increased substantially over the last five years. House prices have really increased steeply and noticeable in certain areas. Just to share some trends:
In Kajang, Taman Bukit Mewah, a Double Storey Link/Intermediate 20 X 75 by Metro Kajang was launched in 2004/2005 for RM238,900. In 2009/2010, the new launch for the type of Property in the same area was launched at RM327,600, an increase of RM88,700, or 37 per cent. Now, Kajang is considered a “Not Hot Area”.
In Seri Utama, at Kota Damansara, which is considered a “Hot Area”, a 22 X 75 intermediate by See Hoy Chan Group was launched in 2004/2005 at an average of RM330,000. Today, the average asking price is about RM600,000, an increase of RM270K, or 80 per cent.
In Bandar Puteri Puchong by IOI, the average asking price in 2004/2005 for an intermediate DSL was only RM400,000. Today, it has gone up to an average of RM600,000, an increase of RM200,000, or 50 per cent.
The reason lies in unsustainable speculation fuelled by easy credit and low interest rates.
There exists a ‘unholy alliance’ between certain developers, valuers and banks. In an environment of hot demand, the banks work in cahoots with developers assisted by those wayward valuers. Our ‘teh tarik syndrome’ is also very relevant. When the price of condensed milk increases by 20 sen, the entire cost of ‘teh tarik’ increases by 20 sen. Similarly, when the cost of construction increases by 20 per cent, the equivalent cost of housing increases. Greed versus the market environment!
It has always been the Government’s aspiration for every citizen to have a roof over their head and the Government should continue to push this agenda. Genuine house buyers should always have access to affordable financing as more social problems will arise when citizens cannot afford homes.