SHAH ALAM: The Housing and Local Government Ministry does not foresee a property “bubble” in the country, where a rise in prices will be followed by a rapid reduction.

Minister Datuk Chor Chee Heung said that so far this year, property prices had increased by 37%, unlike Singapore and Hong Kong where the figure had already exceeded by 35% last year.

He said the increase in property prices since 2008 was due to the high cost of land, building material and entry of foreign companies into the sector.

“We still have a long way to go before reaching a property bubble,” he told reporters after the launch of Setia City here yesterday.

Chor said local property prices were still much lower and “nowhere near” those in Jakarta, Hong Kong and Bangkok.

“Last year and this year, the most sought after homes were priced between RM150,000 and RM180,000,” he pointed out.

Chor said the ministry and Bank Negara were monitoring the situation in the industry and if need be, action would be taken to prevent hardship to the people and economy.

He said that even developers had realised that there would be a drop in prices if they continued building properties.

“That is why since late last year, there was a reduction of 19% in the number of houses built nationwide,” he said.

On another matter, Chor said the ministry had proposed to the Cabinet the incorporation of pro-green features, like the rain harvesting system, as a requirement in the Uniform Building By-Laws.

In his speech, the minister said “green builders” held a competitive edge over their traditional counterparts as the norm now was towards energy-efficient buildings and water conservation facilities.

“The Malaysian Green Building Index (GBI), a rating tool that was launched early last year, provides an opportunity for developers and building owners to design and construct green and sustainable buildings.

“Going green is important but it is equally vital, if not more, that the maintenance of such initiatives over the long term is sustained,” he said, complimenting SP Setia Bhd, the developer of Setia City, for building an integrated green commercial hub.

Setia City is a 97ha integrated green commercial hub that will comprise office towers, hotels, service apartments and a retail mall.

SOURCE: The Star