KOTA KINABALU: The exorbitant prices of houses in Sabah are very much due to the high users’ capital contribution charged by service companies such as Sabah Electricity Sdn Bhd (SESB), Telekom and the Water Department.
According to Local Government and Housing Minister Datuk Hajiji Haji Noor, the capital contribution charged by these service companies are five times higher here than in Peninsular Malaysia.
He said the capital contribution were imposed on housing developers in Sabah, who in turn include these costs when setting the prices for the housing properties, resulting in housing buyers shouldering the high costs incurred.
“I would like to stress here that GLCs (government linked companies) such as Telekom Malaysia and Sabah Electricity Sdn Bhd together with other government agencies such as the Water Department must rationalise to help lower house prices. We would like to see the rates on the capital contribution to be lower than the current rates or at least on par with the rates in Peninsular Malaysia,”he said.
Hajiji said this during the‘Rationalisation of Property Development in Sabah’forum held at the Magellan Sutera Harbour Resort near here yesterday.
He expressed the hope that the forum would be able to come up with proposals/recommendations that could be brought up to the cabinet for further action.
He also said that among others, the forum would touch on issues related to the Cabotage Policy and other causes of high property prices in Sabah.
Earlier, in his speech, Hajiji pointed out that a double storey terrace house in Kota Kinabalu in 2007 was sold at RM210,000, but today, a similar unit on the outskirts of Kota Kinabalu, such as Menggatal or Penampang, were being sold for RM450,000.
“That is a growth of some 11.5 percent. Comparing this with the mean income growth of 7.2 percent for the period of 2009 to 2012, it shows that the housing price index has grown faster than the general income of the public,”he revealed.
He also said that the phenomenon of the rise in the selling price of houses was very obvious in the last five years.
“Various rationales were provided for this, foremost among them is the increased cost of land, building material and labour.”
“On this, my ministry is conducting a study based on the submission by a professional consultant against the valuation report on the land cost and actual figure on the tender documents for the building and labour cost. We will study the results carefully, and, if indeed, the costs are in line with the professional submission, then it is perhaps high time for the construction industry to look to other avenues when undertaking housing construction, such as more mechanised equipment and modular system,”he said.
Hajiji also challenged the professionals such as consultant engineers, architects and quantity surveyors to work together with the housing developers to adopt available technology to lower the costs of construction and labour.
“Significantly, building and infrastructure costs contribute 70 percent of development cost whereas the balance 30 percent lies with land cost, capital contribution, professional fees, marketing and administration cost,”he said.
Hajiji also stressed that the State Government was well aware of the grouses on the issue of house prices that has gone beyond the affordability of the general public.
He said that he was aware of the issue and his ministry was monitoring the situation and had been out trying out various administrative procedures to curb the price increase.
“If and when necessary, I will instruct the Housing Controller to seek new approaches to mitigate this matter; like employing a quantity surveyor to evaluate the submission by industry players prior to approving their housing developers licence. The reasons provided by the industry players to increase prices are only one side of the story,” he said.
He added that the government has a duty to ensure that the people can afford to buy houses and called on the Royal Institution of Surveyors Malaysia (RISM) to speed up the study on the reasons for the price increase and to give positive proposals to overcome the situation by the end of the year.
“I am positive that the study can assist to verify the truth or otherwise as claimed by the industry players,” he said.
Hajiji also said that schemes such as the Developers Interest Bearing Schemes or DIBS has been disallowed in Peninsular Malaysia as it has been blamed for indirectly increasing house prices as buyers will have to bear the cost of interest in the selling price eventually.
“To curb further speculation, developers are required to inform whenever there are buyers purchasing more than four properties in the same development. To increase and make possible home ownership among the first-time home buyers, the Federal Government has also introduced the incentive of RM30,000 under the My Home Scheme. All these steps taken indicate the concern of the government towards the increases of house prices,” he said.
Other than that, the Federal Government has also introduced various programmes.
In Sabah, he said the State Government has forged smart partnership with the Sabah Housing and Real Estate Developers Association (SHAREDA) to build 10,000 units of affordable houses in Sabah and capping the prices at RM250,000.
“All these measures taken are, in part, to counter the increases in the selling price of houses.”
He added that his ministry and its federal counterpart have completed 13,756 units of PPR houses with 5,227 units still under construction.
“A further 38,000 units of PPR houses are in the pipeline,”he said.
Also present at the event were Institute of Development Studies (IDS) chairman Datuk Seri Panglima Clarence B. Malakun and IDS chief executive officer Datuk Mohd Hasnol Ayub.