Developers "preparing to exploit house buyers"
NST 13/4/2004

KUALA LUMPUR, Mon- Exploitation - this is how the National House Buyers Association (HBA) sees the move to raise the prices of houses following the recent increase in steel price.

Secretary-general Chang Kim Loong said today recent reports indicated that buyers could expect a five to 10 per cent hike in prices in the next few months.

"It has been claimed that the rise in price of steel alone has added between five and 10 per cent to the cost of construction and unless the situation improves, house prices will go up in three to six months," he said.

Chang said the housing industry players were laying the groundwork for the execution of the "teh tarik formula", a situation where a glass of the drink would be raised by 10 sen just because the price of condensed milk rose by 10 sen although milk made up only a portion of the total cost.

Similarly, he said, steel was only a component in the construction of houses and the HBA's calculation showed that it accounted for just 0.74 per cent of the total construction cost.

"Is the negligible increase so unbearable for industry players that they have to raise house prices? We contend that anything over one per cent is exploitation," he said.

"It appears that house buyers will see another round of hard squeezing by the industry players," he said in a statement.