Why should the rest of the country
subsidise these developers’ marketing
of their product? They made a bad
business decision and the rest of us
have to subsidise their loss? Why don’t
these developers just give a “higher”
percentage of discount on these
properties? It’s elementary economic
that when a product can’t sell, you sell
it cheaper in a soft market, especially so
in these Covid-19 times.
There is no difference between a
property of RM1 mil with the stamp
duties (tax) of RM24,000 waived by the
government and a developer selling
the property at RM976,000 and the
purchaser paying the RM24,000 stamp
fee to the government. The adage
“privatising profits and socialising
losses” is most apt to describe the
situation.
The root of the problem remains
to be pricing
The crux of the matter for decades
now has been pricing when it comes to
home purchase. Yes, it is applaudable
that the HOC would directly offer a 10%
discount to buyers. This would drop the
price for home purchase, but would the
drop be significantly enough to achive
this task?
Chang:
(So what is the actual problem?)
This HOC move is obviously to assist
housing developers to “dispose of” their
unsold stock that has been statistically
categorised as “unsold overhang”
properties. The real reason why most
developers were and are not able to sell
their houses is the pricing. It is not an
unknown fact that even without HOC,
developers are known to have given
discounts and rebates, sometimes
as much as 25%. Advertisements of
20% to 30% have been sighted and
acknowledged by market players.
If with all these rebates that were given,
developers find it difficult to sell their
houses, it comes as a surprise that the
government has come out partnering
in the HOC again and at a mere 10%
discount. Will this move help or will it
work?
It is really not difficult to understand
why developers pitch such steep prices
and only to give discounts, rebates
and other freebies. If they cannot
sell it in normal times, it is difficult to
understand how they can sell under
the HOC, unless the new 10% that the
government has mentioned is after the
“various” discounts that they would
normally give.
Transparency in price discovery is
lacking. The financial institutions seem
to be aware of the discounts and rebates,
but how these have been translated into
loans is not known. The government
ought to let the market play its role with
the banking sector sticking to the real
prices. Greater accountability must be
enforced on developers to account for
selling prices, discounts and rebates.
The act of increasing the price and then
offering a rebate appears to help the
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