Pricing Of PR1MA’s Affordable Homes Will Stabilise Set New Benchmark
Pricing of affordable home projects by the Perbadanan PR1MA Malaysia (PR1MA) will have a stabilising effect and act as a benchmark for similar range of residential houses to be offered by other private developers.
The property market would soon react and match PR1MA’s pricing, which would be 25 per cent cheaper than the market value, said Rahim and Co Chartered Surveyors Sdn Bhd Executive Chairman Tan Sri Abdul Rahim Rahman.
“If a PR1MA house only cost around RM250,000, who would want to buy a house from a private developer who fixes the price between 20 and 40 per cent higher?
“The private sector will have no choice but to follow suit and start bringing down the price to almost match what is being offered by PR1MA,” he said after releasing the “Rahim & Co Research – Property Market Review 2014/2015″ here today.
Rahim said with PR1MA, there would be more affordable houses in the market and the situation would stabilise.
“With PR1MA, prices for affordable houses will not go up in a spiral manner in future,” he said, adding the people must give a chance to PR1MA as the organisation is still new.
Rahim opined the ideal range for affordable houses in Kuala Lumpur should be in the range of between RM300,000 and RM400,000, whereas in other part of the country it should be much lower.
In its report, the international property consultant said property prices in Malaysia this year were expected to trend higher throughout the country, albeit, at a slower growth, despite the multitude of cooling measures in place and the escalating living costs.
On the Good and Services Tax (GST), Rahim said the market would remain cautious with buyers, sellers and some developers adopting a “wait and see” attitude.
It is expected that property prices would increase not only due to the GST but also the market’s supply and demand mechanism.
“Building materials are subject to GST but the transactions in residential property are GST exempt. In my opinion, if there is an increase due to this tax, it would not exceed three per cent,” he said.
“A gradual increase in house prices is good for the country, but there must be provisions, conditions and law enforcement in order to provide houses for everybody, not just for the wealthy,” he added.