PR1MA Corp's move will raise house prices: HBA

08 Oct 2014 / 05:40 H.

PETALING JAYA: The National House Buyers Association (HBA) has criticised PR1MA Corp Malaysia's decision to work with private developers for the housing scheme under the 1Malaysia People's Housing Programme (PR1MA), saying that the move will see houses under the scheme priced only slightly lower than market price, defeating the purpose of the scheme.
HBA secretary-general Chang Kim Loong told SunBiz, the problem with this arrangement is that developers will add their profits to the price tags, which could push prices of PR1MA houses to almost the same level as market prices.
"In fact, recently a Penang politician criticised the Penang government for taking precisely such a step. The politician went on to say that it may now be expected that with developers being invited to participate, PR1MA house prices will be fixed at a price only slightly lower than market price houses to 'pull wool over the eyes' of the people that they are PR1MA houses.
"Who are these developers, how are they chosen and on what consideration are they being given PR1MA undertakings and tasks? It is becoming like the all-too-familiar story of privatisation of government amenities: no transparency, sudden wealth for the chosen few, immediate higher cost to the consuming public and with the immunity of affirmative action to frighten off critics," he added.
Chang said with developers involved, prices are unlikely to remain at lower levels for long especially with various "excuses" such as higher cost of materials and shortage of workers.
PR1MA Corp was set up to plan and coordinate projects under the scheme, which aims to meet the needs of people who do not qualify for low-cost homes but at the same time, not able to afford houses at current prices.
"In order to make PR1MA house prices affordable, the government had promised to set aside land (PR1MA land) for this category of house buyers. PR1MA land represents a considerable value and subsidy to these buyers. It is therefore the main responsibility of PR1MA Corp, which has been set up by law to operate the PR1MA scheme, to ensure that PR1MA houses remain affordable.
"It was expected that the PR1MA organisation would not do anything that could cause prices to go up. To achieve this, the PR1MA organisation has to be and was conceived to be a developer in its own right. PR1MA-as-developer may engage construction companies to build the houses on the land given by the government. Why then, should they joint venture with private developers, when PR1MA themselves should be the housing developer?" he questioned.
Chang said the PR1MA scheme is a "noble idea" but has not been properly implemented and HBA is calling for more transparency and accountability in the programme.
He also questioned the move to make PR1MA available for second time house buyers, when there is not enough to go around for first time buyers.
"Some form of control, to give credit where it is due, has been mentioned by PR1MA Corp CEO Datuk Abdul Mutalib Alias to ensure that purchasers become occupiers and not carpet-baggers out to make a fast buck. It is hoped that the PR1MA organisation will work with opposition-controlled state governments as these are where the concentration of the urban poor, where government policies have caused severe shortages of affordable housing for example, the abolition of rent control without offering any alternatives. The less-well-off people of these areas do not deserve to be politically victimised."
Chang also said that PR1MA should be under the purview of the Ministry of Housing and Local Government rather than being a unit of the Prime Minister's Department, which means the scheme is operating outside the current Housing Development (Control & Licensing) Act.
"PR1MA developers need not be licensed to build and there is no need for advertisement and sales permit thus buyers who buy into PR1MA projects will not be protected under the Act."

thesundaily_my Sentifi Top 10 talked about stocks