KUALA LUMPUR (April 26): The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) is a calling upon the Housing and Local Government Ministry to change primary housing market advertising regulations so that housing prices in advertisements are clearer in nature.
In a statement today, the association said primary housing market advertisements should not only include what it deems a "headline price", but also disclose the actual price at which potential buyers can secure the purchase.
"The incentives and rebates must be detailed out in the advertisement and brochures, in the interest of transparency for the house buying public and for assisting in creating a more efficient housing market," added PEPS.
PEPS added that the primary housing market has poor price discovery mechanisms, as potential house buyers do not actually know the real price of their properties until the point of actual purchase.
Consequently, it has labelled this issue as inefficiency in the housing market, as it prevents house prices from adjusting downwards to a more "sustainable and transparent median house price ratio as against income".
In the same vein, the association also highlighted those potential buyers only know the true extent of the various incentives and rebates, which in some instances range from 20% to 30%, until they are the point of purchase.
"The lack of an overall housing policy as well as down the line aspects such as the absence of regulation on price discovery in the primary market are to be blamed for inflated home prices and not valuation and valuation methodology," PEPS added.
It noted that while banks and financial institutions are doing their best, as their property valuations and subsequent housing purchase credit facilities are based upon the real property prices to protect against loan defaults that will result in unsellable properties at auctions.