Maddening hike in house prices

The spiralling costs of houses are making life for the lower- and middle-income earners difficult to endure.

He said the middle- and lower-income groups are forced to purchase their homes out-of -town since they cannot sustain the high cost of living in the urban areas.

B Nantha Kumar, Free Malaysia Today

What is the cost of a 480-sq-ft studio apartment, which is half the size of a PPR (People Housing Project) flat?

If your guess is less than RM200,00 then you got it wrong. The real cost of such a place of dwelling is RM230,000 and this does not include car park charges, maintenance fees and other additional bills.

But bear in mind this studio apartment is not in the centre of Kuala Lumpur or even at up-market locations like Taman Tun Dr Ismail, Hartamas or Kenny Hills. Instead, it is in Seri Kembangan, near Balakong, some 15km away from the federal capital.

Parti Sosialis Malaysia (PSM) chairman Dr Mohd Nasir Hashim, who had been critical of the maddening hike in house prices, said that the problem was affecting Malaysians, especially the lower- and middle-income groups which make the bulk of the population.

The problem is further complicated by the government “which appears to favour housing developers”, he said.

“The federal and state governments never monitor house prices, allowing the developers to set exorbitant prices.

“Although house prices are set according to land value, environment and facilities provided, developers still charge high prices, saying that there is an increase in the cost of raw materials… but the hike in price of these materials is not in tandem with the high house prices,” he added.

Nasir, who is also Kota Damansara state assemblyman, said developers were not interested in building low-cost houses due to the thin profit margin.

“Their main aim is profit ,” he said, adding that more than 140 abandoned projects in Selangor were mostly for low-cost houses.

“This is because the government always favours developers… claiming that the prices of houses are dependent on market forces,” said Nasir.

He said the middle- and lower-income groups are forced to purchase their homes out-of -town since they cannot sustain the high cost of living in the urban areas.

“As a result, they will have to spend more on transport… and this is a new financial burden for them,” he added.

Unable to save for rainy day

Those who wish to buy these “luxury” houses in the city will also have to fork out more to repay their housing loans.

According to statistics, a person who buys an expensive home spends nearly 50% of his total income servicing his housing loan.

“Thus he is not able to save for a rainy day or for old age or for a child’s education,” said Nasir.

Nasir said the migration of the middle and lower income groups to the outskirts has also resulted in foreign workers taking up renting space in the cities.

“I can say that there is no political will to solve this problems.”

He suggested that the government, be it federal or state, form a housing commission to monitor house prices and curb excessive profiteering by developers.

“The commission can work as a watchdog so that the people would be able to buy houses at a more reasonable price as opposed to the current open market system,” he added.

He also suggested that the government build more good quality low-cost houses so that those who need homes would get “value for money” homes.

He said the middle-income group in the country shuns low-cost houses because of their poor quality.

“The government should come up with houses that are spacious, and not pigeon-holes with one or two rooms for a family of five or six,” said Nasir.