Friday August 31, 2012
Sheda: Restricting cash flow of developers will only increase price of houses
By YU JI
KUCHING: The Sarawak Housing and Real Estate Developers Association (Sheda) says the Opposition is “barking up the wrong tree” in its proposal to increase financial restrictions on builders as a measure to ensure better quality and faster delivery of houses.
“Ask the authorities to be more efficient. Don’t impose more rules on housing developers,” Sheda secretary Sim Kiang Chiok told The Star yesterday.
“Imposing cash flow restrictions will only lead to higher house prices. The moment you restrict cash flow to developers, they will think of new ways to increase their cash flow to do the job, so then the price of ‘doing the job’ will increase,” Sim said.
Sim described housing developers as “assemblers”, saying: “We assemble things, that’s basically it. If the cost is high, we sell high. If the cost is low, we sell low.”
Sim was asked to comment on Pelawan assemblyman David Wong’s suggestion for banks to increase retainers on housing deve- lopers.
Wong, a DAP member, had said that more money needed to be withheld from developers to ensure that their houses are delivered on time with better quality.
Currently, banks are mandated by law to withhold 5% from developers, out of which half is for the occupation permit and the other half for land titles.
Wong said the retained amount should be increased to 5% for the permit and 10% for the land titles.
The Opposition member said the Housing Developers (Control and Licensing) Ordinance 2009 would need to be amended to enable banks to increase the retainers.
In Sibu this week, a group of 97 house owners staged a demonstration, accusing a housing developer of slow delivery of products with bad quality. Some of the house owners purchased their property up to seven years ago.
But due to bad quality, the council has refused to issue occupation permits, which in turn meant land titles could not be issued.
The group of owners, Sheda said, should seek legal recourse based on protections guaranteed in their sale and purchase agreements.
Sim said people should never move into houses without permits and land titles.
“Contractually, house owners have legal recourse. Use that right. Imposing restriction on developers will make it even more costly to build houses,” Sim said.