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Thursday, October 21, 2010

'Long way to property bubble in Malaysia'

SHAH ALAM: There is still a long way to reach property bubble in Malaysia, says Housing and Local Government Minister Datuk Wira Chor Chee Heung.

According to the Housing Index for the last 10 years, prices of houses have moved about 37 per cent while in countries like Singapore and Hong Kong, property prices shot passed 35 per cent last year, he said.

He said property prices in Malaysia started to rise since 2008 due to land cost, building materials and vibrancy of the economy as a result of the initiatives and measures taken by the federal government.

"This is also as a result of foreign companies coming into this country to invest in properties. Because of the aggressive policies by the government, a lot of foreign companies set up bases in this country and bought properties for their senior staff and executives," he said when launching Setia City, an integrated green commercial hub in Shah Alam to be developed by SP Setia Bhd.

Chor, however, said it did not mean ordinary people who just joined the workforce are not able to buy houses.

"If you go further up a bit, 10km away from the KL City Centre, you are still able to find a reasonably-priced house. "If you say you can't find houses in the Klang Valley within the RM350,000 range, I will not believe you, but you have to travel a bit further out of the city centre.

"In central Kuala Lumpur, you can't find houses within the range of RM150,000 to RM300,000. Last year and this year, the most sought-after properties are in the range of RM150,000 to RM180,000.

"In central Kuala Lumpur, you can't find houses within the range of RM150,000 to RM300,000.

"This is the result of government efforts to transform Kuala Lumpur into a bustling city. If you find a house at RM200,000 within the Kuala Lumpur City, this means our economy is in bad shape," he said.

Chor said the government was concerned of this and that was why incentives were provided for in the 2011 Budget to assist low-income earners and young people who just joined the workforce to buy houses.

The minister, however, said the government would not control property prices as Malaysia was a free economy.

"The government will intervene if certain things happen that will bring disaster to the economy and the people," he said.
Chor said people have been buying houses since 2008 and he did not deny that there could be some speculation.

"There is also a sudden drop in the number of houses to be built last year and this showed developers are also studying the market situation," he said.

SP Setia president and chief executive officer Tan Sri Liew Kee Sin said there was no where to build houses within the RM350,000 price range except in Johor where land was cheaper.

"Land cost is a factor of the end-product," he said, adding that a large portion of SP Setia's projects were within the price range of RM400,000 to RM1 million.

By Bernama

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