GEORGE TOWN, Sept 27 – Developers should be allowed to build more residential properties to rectify the supply shortage that is driving home prices skyward, according to the Malaysian Institute of Estate Agents (MIEA).
MIEA president Siva Shanker said that, at the moment, the houses being built are only slightly more than half of what the market demands.
“Every year, the shortfall of housing increases so this affected the prices, which kept increasing,” he said in a press conference today at the launch of the Malaysian Secondary Property Exhibition (MASPEX) Penang 2013 at Penang Times Square today.
Siva said addressing the issue was just a simple matter of a supply and demand: Adequate supply to meet demand means prices will definitely go down.
“If the market demands for more properties, all we need to do is to build more properties to meet the demands,” he said.
He suggested for the process of building more properties to be made easier so that the supply could be increased.
“If we saturate the market with housing, then demand will decrease and speculation will be over,” he said.
Earlier, Siva also said property speculation is another factor driving property prices to increase.
He also said raising the real property gains tax (RPGT) will not curb speculation, reasoning that speculators buy property from developers that take two to three years to complete to resell later.
“Let’s say the RPGT rate is 40 per cent for the first year, 30 per cent for the second year and 10 per cent for the third year, when the speculators flip the property, the RPGT is only 10 per cent so it would not affect them much,” he said as an example.
MASPEX Penang organising chairman Michael Geh agreed that developers should be allowed to build more units and that the conversion premiums be reduced by at least 30 per cent.
“Developers should be given fast-track approvals for properties below RM350,000 so that they could built more to meet market demands,” he said.
On Penang’s context, Geh said there are vast land in the hinterland to build more housing and with the Second Penang Bridge coming up, it should benefit the mainland more.
“If the state government is serious in wanting to reduce property prices, it should allow speedy approvals of projects that costs less than RM350,000,” he said.
MASPEX Penang 2013 is a three-day event held at Penang Times Square that showcases second-hand properties within the price range of RM75,000 up to a few million.
About RM1.5 billion worth of properties are showcased during the exhibition with about 1,800 properties on sale.
