KOTA BHARU, Dec 22 — House prices in Kelantan either in the city or rural areas are expensive because developers tend to increase the selling prices when they received high demand for the houses after they are 50 per cent complete, said state Malay Contractors Association president Datuk Mohd Rosdi Abdul Aziz.

Mohd Rosdi said even though the costs for the material, size, location, finishing and design of the houses as well as demand were factors in determining house prices, greedy developers who rake in excessive profit have made matters worse.

"For example, the starting price for a house to be built is about RM200,000, but after 50 per cent of the project has completed, the developer will start to raise the price until it reached RM250,000.

"As the contractor executing a housing project, I can see that the price of goods such as cement, wood and others are not that expensive because it all depends on market volatility, but developers want to make extra profit,” he said when contacted by Bernama here.

Mohd Rosdi, who is also Malay Contractor Association of Malaysia vice president, cited an example that the construction of ‘Rumah Mesra Rakyat’, measuring 1,000 sq ft, would only cost RM60,000 excluding the cost of the house site, but buying the same house from a developer could cost up to RM250,000.  

"House prices with the same specifications built by developers are very different from contractors, and to overcome this problem, I think the government should intervene by setting a ceiling price for medium-cost and low-cost housing.

"This is important because the buyer has to bear the burden since the house is a necessity...whether they want it or not, they have to buy even though they are disappointed with the price offered by the developer,” he said.

Meanwhile, Universiti Malaysia Kelantan (UMK) Global Entrepreneurship Research and Innovation Centre (GERIC) director Prof Dr Nik Maheran Nik Muhammad said future retirees should be prudent in planning the usage of their Employees Provident Fund (EPF) savings after leaving the working world.

Nik Maheran said retirees should no longer have debts such as housing, vehicle and children’s education fees.

"Retirees should just use their savings for daily and health expenses. They need to do financial planning so that their retirement savings can be used for that purpose,” she told Bernama when met recently.

To optimise their savings for retirement, Nik Maheran said the retirees should think how to double the amount of their savings with regard to the changing economic factors.

She said among the measures that could be taken was to invest their retirement savings in highly liquid investments such as Amanah Saham Bumiputera (ASB), Tabung Haji (TH) and insurance.

"This is important because retirees need to have at least 75 per cent of their last salary when they retired so that they can live comfortably without worrying about financial burden.

"Moreover, before retiring, they also have to make personal savings of at least 30 per cent from their salary within a minimum period of 10 years,” she said.

Nik Maheran said retirees must also refrain from joining any get-rich-quick scheme which offers high profit each month as they were high-risk investments.  

Nik Maheran also did not encourage them to open their own business because retirement days should be spent with family.

"But if retirees want to go into business, they are advised to use only 10 per cent of the total savings and not to invest everything in their business.

"Before opening a business, retirees need to have a clear understanding in the business to avoid losses,” she said.    

In another development, Nik Maheran said there was an alarming trend of entrepreneurs, who did not have savings in the EPF, using all of their profits without thinking about their future.

She said a study revealed that only about 10 per cent of entrepreneurs, especially small and medium enterprise (SME) entrepreneurs, had made effective retirement planning.

"They live comfortably now because they received high profit, but at the same time not making any retirement planning as the economy is constantly changing.

"So I urge the EPF to advise the entrepreneurs to allocate some of the company’s income for their retirement,” she said. — Bernama