Sabah property market: A debate between minister and Shareda

State Ministry of Local Government and Housing Minister Datuk Hajiji Noor has asked the developers in Sabah to reduce the prices of some houses as the developers have been getting profit margins exceeding 30 percent for them. This is needed because the people are finding it tougher to buy a home to call their own. The state Housing Controller, through the Local Government and Housing Ministry deputy permanent secretary Rayman Loudrize, has also informed developers to reduce the prices of their new projects or this will result in their housing development licence, advertising permits and price list applications not being approved.
Sabah Housing and Real Estate Developers Association (SHAREDA) president Datuk Francis Goh responded by saying that the 10% reduction was unreasonable as developers were already complying with the 30% cap in profit margin. This new order issued last month would most probably be discouraging the developers from launching new projects. Besides that, despite the fact that the 30% profit margin was not a written rule, Sabah developers have always worked closely with quantity surveyors to ensure the proposed selling prices are below the cap. Due to this order, the developers have no choice but to go to court to seek a judicial review on the Housing Controller’s order.
I think both sides would have their own sides of the story. With a slowing demand and the prudent lending approvals from the banks, the total property transactions is already on the way down. I think there is some truth in the fact that market forces may dictate prices. However, I think it is important that these analysis be quantified. Not just one side but both sides. Instead of just speaking, why not show some numbers. Perhaps there are some hidden costs somewhere? The more transparent all parties are, the better it is for an objective discussion to happen. The benefit is definitely the people themselves. I think this is something that everyone has been asking from the government anyway. Happy reading.
written on 25 Oct 2015
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