In the rural areas, smallholdings have increased in land prices from say Rm30,000 an acre to over Rm100,000, depending on location. For example, land owners in Sitiawan areas who sold their much appreciated land at over Rm200,000 per acre would find prices in Pusing cheap. The demand from the mainly Fook Chou buyers had caused the prices to increase, leaving local potential buyers lamenting that they could never afford to buy at such prices. Like any market in an uptrend, those who sold much earlier regretted while those who bought from them are sitting on potential gains.
The house prices in KL and its surrounding Klang valley areas have risen much despite depressed property markets in the West. While some are expecting the bubble to burst, others are still enjoying the gains from speculation. For example, a buyer in Putra Heights paid 10% downpayment for a Rm450,000 house has seen the price risen to over Rm700,000 nearing completion.. But this is like a 'catch 22' situation in which the owner cannot sell to realise the gain without having to pay a similar amount for a similar house in or near the locality! It would have been ideal for someone, especially a would be retiree, to sell in the process of downsizing or to move to a smaller town for retirement.
The rising property prices for the past few years had created an unhealthy demand from speculators. Having seen how some could easily make six-figure gains from a mere 10% down payment, many new entrants have joined the game. The Build Then Sell concept is actually helping to fuel speculation. Imagine not having to pay for progress payments like before, for 2 years, after which any appreciation in price is like a windfall should he cash out.
To prevent speculation, there is a proposal to increase RPGT from 5% to 10%, if sold within 2 years of purchase. This is not a deterrent when the gain is into six figures. The working class is now faced with house prices which are beyond their reach. The speculators are still laughing all the way to the bank, unless and until policy makers decide to put a credit or other squeeze on them.
I think our houses and apartments are considered too generous in size when compared to those in the developed countries in the West. One way to help first-time buyers is to build smaller apartments, like studios or one-room apartments in expensive KL, and slightly bigger ones, even houses, in the outskirts but near railway or LRT stations, for easy commuting to work. In fact, where land is cheap, planning for cheaper houses and public transport should be coordinated. As a retiree, my idea of a livable house is just one room, a kitchenette, a small sitting area, toilet and shower. I am sure first-time buyers can live in such conditions until they are able to upgrade.
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