‘Let market forces set prices for luxury homes’

Chang-Kim-Loong-hbaPETALING JAYA: The National House Buyers Association (HBA) has lent its support to Malacca property developers in their call for freedom to set prices for properties that are outside the “affordable homes” category.

Speaking to FMT, HBA secretary-general Chang Kim Loong said his association believed it would be sufficient for government price regulations to cover only those houses that average Malaysians could afford.

HBA’s definition of an affordable house is one priced between RM150,000 and RM300,000. For houses located in what may be considered prime areas, the limit is RM350,000.

“Also, such a house must have a minimum built-up space of 800 square feet, excluding the balcony, and must have three bedrooms for a conducive family life,” Chang said.

He said the prices of high-end properties should be dictated by market forces.

Yeah Kim Leng, a professor of economics at Sunway University’s Business School, agreed with Chang.

“Prolonged government intervention could distort the market, making it difficult for the government to ascertain the actual supply-and-demand situation,” he said.

Yeah said the government should just ensure the quality of the homes and focus on keeping regulatory costs low or reducing them.

“If this can be done, and more players are encouraged to enter the market, you’ll have healthy competition between developers and this can help ensure competitive pricing,” he added.

Anthony Adam Cho, a former chairman of the Malacca chapter of Rehda (Real Estate and Housing Developers Association), congratulated the Malacca government for having done “a great job in developing affordable homes”, referring to the progress it had achieved in its programme to build 50,000 such houses by 2020.

“So, we hope it can now allow developers to set the prices for homes which aren’t in the affordable homes category,” he said.

“Nowadays, there are many people who don’t want a generic-type of home. They want homes with more landscaping, smart homes, different types of flooring or finishing.

“But at the moment, we are restricted to what we can produce because of the selling price.”