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Valuation Dep’t Can’t Control Home Prices, But National Housing Dep’t Can

The Finance Ministry’s Valuation and Property Services Department (JPPH) cannot dictate property prices, including the price tag of houses, reported Bernama.

According to JPPH Director-General Nordin Daharom, the selling price of residential properties are based on their demand and supply as well as other market factors such as location. This is except for affordable housing being marketed by home builders, as their maximum price has been limited by the respective state governments where the units are located.

“Among the key components that are said to influence the costs of housing development are the costs of land and building materials. This burden is then reflected in the price of the house concern which the buyer has to bear,” he said on Monday (1 Oct) in reply to a newspaper article claiming that JPPH can control home prices.

Other factors that affect residential prices include financing costs, infrastructure development charges, contributions to utility providers and expenses to comply with government’s planning requirements. Professional fees, insurance, developer deposits, labour costs and marketing expenses have an impact on prices as well.

“In this regard, there is a proposal to establish a Housing Cost and Price Committee to monitor the cost of development components to keep residential property prices under control.” The components to be monitored include developers’ profit margin, along with the cost of labour, construction materials and infrastructure.

Nordin explained that JPPH’s role is not to control prices, but to provide real estate valuation and related services to the government. Another key responsibility is to gather accurate, comprehensive and timely data on Malaysia’s property market via the National Property Information Centre (NAPIC).

The info helps property developers decide on how much units they need to build and what type of houses they need to construct, while the public can get an idea on the fair market value of a property in their area.

These statistics – like home sales by number and value as well as demand and supply – also help guide government officials on approving projects along with implementing policies and measures.

“With the dissemination of information on the real estate market from time to time, developers, buyers, and authorities that approve projects, in particular, housing projects are kept abreast of the market’s situation,” he noted.

While JPPH can’t control home prices, the Ministry of Housing and Local Government’s unit, the National Housing Department, can set minimum and maximum prices.

This is because before a home builder can get an Advertising and Sales Permit from the National Housing Department’s Housing Development Licensing Division, among the requirements it needs to submit is the selling price for all properties.

“This shows that the price list, as well as minimum and maximum selling prices, can be regulated by the National Housing Department,” he added.

Source From: https://www.propertyguru.com.my

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