Oversupply of homes: Who is to be blamed?

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Source: The Edge, 23 October 2017

Come forward with a community-oriented policy and work with the government to resolve this issue, says WH Cheng.

Some parties have started to put the blame on the government for the oversupply of homes.

Who should be blamed for the oversupply of homes and other kinds of unsold properties? The federal government, state government or the developers?

From the public perspective, the federal government outlines the housing policy; the state government enforces and ensures regulations on land and housing are adhered to; while the developers acquire the land allocated, construct, build and sell properties to the public.

Developers wanted to sell for profit. The government wanted to collect revenues to increase their funds to finance the development of better infrastructure for the people in the country.

In the case of the building of houses, shops or even shopping complexes around selected areas, whose plans are they? Planning for affordable homes often involves determining the locations of these houses to be built, ensuring that prices are affordable to the public, and building houses and properties at a minimal cost, using the cheapest labour to carry out the construction.

In the end, who grabs all the profits? The developers, of course.

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Who plans and comes up with the conditions for all these affordable homes? The state government.

In most cases, who determines the market prices of these properties? Yes, the developers, the real estate valuers, agents and sellers are the ones who ensure that the prices of these properties go up in order to reap as much profit as possible.

At the end of the day, when these houses are in the wrong locations, when these houses or properties are too expensive for our citizens, what happens? Many are left unsold, house-buyers end up unable to continue servicing their housing loans, thus they risk being served bankruptcy orders and having their properties auctioned. Yes, auctioned to the highest bidders. Then the banks get the profits too. So do the agents of the respective parties.

In this flow, the people suffer due to the high prices of properties. They are unable to buy a house of their own. Instead, they have to resort to renting at a high cost. It is a living hell.

And now you see, the party who reaps the most profit gets to complain that the oversupply of homes is going to hurt their pockets soon. They have nobody else to blame but the government of the day because these unsold properties are adding up to a glut and going to hurt their pockets almost any second now.

There is actually no mechanism to control rising or falling property values in this world because the prices are determined by the development of lands, demand and supply, the buyers’ tastes, foreign investment and the potential of the location.

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Simply building more houses is not a must. And if you insist on that, it is purely so that someone can profit. Can we make housing a human rights issue? Many want the right to housing to be made a basic right, but will the market, which is the deciding factor, allow this to happen?

You should know who controls the market price of properties today. It is not the government; it is not the people, but… you know where the profit goes.

So, stop the blame game; stop issuing warnings and address the issue together. Come forward with a community-oriented policy and work with the government to resolve this issue.

Coming up with the solution to the housing problem is not a one-person show. It is not only the government’s responsibility. Those with commercial interests ought to make some sacrifices so that we can achieve reasonable control over the situation.

Source: inter-researchstudies.blogspot.com

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