PEPS: Rebates & Incentives Are Inflating House Prices
By: Jotham Lim
The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) has asked Ministry of Housing & Local Government to immediately regulate that all advertisements for the primary property market to display the actual price at which a buyer can secure a purchase.
The ability to markup property prices serves as the main catalyst for many property purchasing schemes or “strategies” available on the market.
While these strategies may have helped many become homeowners, and landed huge amount of profits to certain individuals, marking up house prices does affect the valuation of the property itself, the valuation of properties in the nearby area, to influencing housing policies on a national scale.
PEPS has commented that incentives and rebates amounting to 30% of the purchasing price can only be revealed to the customers when they are interested in buying a property. The actual prices of the properties remain hidden to the public until the point of actual purchase.
Marking up house prices has prevented them from trending downwards, giving a less transparent median house price to income ratio.
Banks and financial institutions are actively seeking out the actual price of properties through market based valuation. They are doing their best in lending out mortgages based on the actual prices of the property instead of artificially inflated ones.
The statistics from secondary market transactions supplied by valuers and estate agents will help immensely in the valuation process.
“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,” stated PEPS in a press release.
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