Media statement by Dr. Hiew King Cheu in Kota Kinabalu on Saturday, 14^th April 2012:

Property prices became unaffordable

The escalating housing prices in the property market have became unaffordable for the lower income group and especially the younger generations who have just entered into the society. It is very difficult for one to buy a house or an apartment to start a new family or even seek shelter.

I brought up this problem recently in Parliament and asked the Minister of Housing and Local Government concerning the measures on how to control the prices of housing climbing at a very fast rates in order to keep the prices within the affordable level for the younger generations.

The minister answered that the prices of houses are controlled by the factors on supply and demand, location, costs of land, labour and building materials. The government is only having control on the low cost housing to ensure this will benefit the low income group. For other type of housing, the cost is to be ascertained by the developers basing on the market price, supply and demand, before the launching of the project. In some urban area like Klang Valley and Pinang, the prices are usually very high.

The government has some measures to control the escalating prices to help the lower income group like:-

1. Higher Property Gain Tax is imposed to control speculation on landed property, and that is 5% increased to 10% if disposed off in 2 years, 3 to 5 years is 5% and no tax over 5 years.

2. The Margin Of Finance will be fixed at 70% only, and this is because if 30 % of one's own money is utilized to buy house, the chance of speculation is reduced.

The program to assist the younger generation to own a house is:-

1. PR1MA (Program Perumahan 1Malaysia) - with the concept of "Public Private Partnership" (PPP) for the income group between RM2,500 to RM7,500 who can afford to buy houses value from RM150,000 to RM300,000 depends on location. The low price of the PR1MA when compared with the market price is due to the land is government land with a private developer.

2. The Program Perumahan Rakyat (PPR) - where the government will build 161,000 units of affordable and which 78,000 is directly under the government and 83,000 is under private developers.

3. Skim Pinjaman Perumahan (SPP) - to provie loan up to Rm45,000 for 30 years period to build house on own land or family land for income of RM750 to RM2,500 monthly.

4. Skim Rumah Pertamaku (SRP) ¨C the government will increase the maximum price limit of the first house from RM220,000 to RM400,000 for the income group of less than RM3,000 monthly on a house price from RM100,000 to RM400,000. The SRP scheme is operated by Cagamas Berhad, a company authorized by the Ministry of Finance.

The measures and schemes as put up by the Ministry as not effective to control and keep down the prices of houses in the country. There are many factors that contributed to the high housing cost which were not spelled out. The ministry did not give completely the measures to cut down prices. The government actually should work on to find ways to cut prices on the construction which includes production, transportation, labours and machineries and on the land cost etc. In fact every aspects contributing to the high cost have to be dealt with by the government to ensure housing prices is to be put under control.

* Dr Hiew King Cheu, MP for Kota Kinabalu