Chor: Fiscal policies may be tightened

By Sharen Kaur

sharen@nstp.com.my

Published in NST on August 29, 2012

PETALING JAYA: THE government may further tighten fiscal policies to curb excessive property speculation and to ensure house ownership remains within the reach of genuine buyers.

Housing and Local Government Minister Datuk Seri Chor Chee Heung said his ministry will recommend a review of fiscal policies to ensure that prices do not artificially go up because of speculative activities.

Among measures previously introduced were a higher real property gains tax and a lower loan-to-value ratio for third property buyers.

"We are not asking for an increase to the real property gains tax, but rather how we can ensure prices do not artificially go up because of speculation.

"Bank Negara Malaysia should think of other innovative ideas to ensure the sustainability of this sector," Chor said in his keynote address at the 15th National Housing and Property Summit 2012, hosted by the Asian Strategy and Leadership Institute (Asli) here yesterday.

"The government has to mitigate excessive investment and speculative activities in the property market to prevent a property bubble and to ensure that household debts grow at a healthy rate."

On the soaring of property prices over the last few years, Chor said apart from speculative activities, this was also because of the high cost of land and building materials and a higher demand for new housing.

"House prices are increasing across the spectrum. It is a phenomenon worldwide. Nevertheless, if compared to neighbouring countries, our properties are still affordable.

"The majority of Malaysians feel that property prices have increased sharply. We can't blame foreigners for this as they make up less than two per cent of total transactions, compared with about 20 per cent in Singapore."

Based on statistics, the average price for houses in Malaysia had increased by 54.5 per cent between 2000 and last year. The average price of terrace houses in Kuala Lumpur was RM527,133 and RM325,951 in Selangor.

Chor said to ensure sustainable housing development, the state government, property developers and government-linked companies must keep abreast of real demand and the affordability of the locals, especially in the Klang Valley.

"There should be more focus on affordable houses. The role of housing developers should go beyond mere business."

Meanwhile, Asli chairman and Sunway Group founder Tan Sri Jeffrey Cheah urged the government not to take measures that were too drastic to curb real estate speculation as it would slow supply.

"With the tabling of the 2013 Budget coming up, we hope there will be more positive measures. We do not expect any property bubble as our properties are still affordable compared with our neighbours."