PRICE CONTROL FOR HOUSES IN MALAYSIA? AS PRICES SPIKE, STAKEHOLDERS MULL OPTIONS TO KEEP HOMES AFFORDABLE

STAKEHOLDERS are divided on whether price control would be effective in keeping houses affordable.

National House Buyers  Association (HBA) vice-president Brig-Gen (rtd) Goh Seng Toh said houses have become highly unaffordable and drastic measures have to be taken to mitigate the problem.

“We (insist) on price control for oil, flour, and other items, but for housing we let the developer call the shots. To the HBA, a house is more important than oil or sugar,” he said at the panel session, “Housing in Malaysia: A Policy Discourse” organised by Khazanah Research Institute.

“Some developers have got the ‘teh tarik syndrome’ which means when the price of steel bar goes up by 10%, the price of the house also goes up by 10%.”

Goh said the ceiling price for low-cost and affordable housing is an example of price control.

“If we extend the practice further we can cap the prices of houses.”

“Our valuers, our architects, our quality surveyors in HBA  have discussed it and we reckon it is feasible.”

Goh said price control for houses could be introduced in phases.

For starters, regulators could consider applying it on houses priced below RM1 million.

Malaysia, said Goh, could set a precedent for other countries to follow.

National Housing Department director-general Jayaselan K. Navaratnam did not agree that price control is helpful in an open market.

“The ministry (housing and local government) has never had plans to introduce price control because this is an open market,” Jayaselan said.

He said any steps taken in that direction will have an impact on the gross domestic product.

Meanwhile, Real Estate and Housing Developers Association president Soam Heng Choon said there already exist cross subsidies in the form of affordable housing and the Bumiputera quota.

“We are not a socialist country. We need to let the free market work.

”Soam said developers are already bogged down by high input costs such as building materials prices development charges and compliance cost.

The different regulations in each state are also a bane to developers.

To this, Jayaselan said the government is looking at streamlining all regulations pertaining to housing under one umbrella act.

–THE MALAYSIAN INSIGHT

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