Government urged to review basic construction costs of houses

These costs include basic construction costs, land costs, incidental development charges and statutory contributions for utilities such as electricity and water, said Kuala Kangsar MP Datuk Wan Mohammad Khair-il Anuar Wan Ahmad.

He said housing developers' justification that construction materials and land are expensive is a myth.

"This is because developers purchase construction materials in bulk at lower prices, and can lock in house prices for future purchases.

"The reality is the physical cost to construct a 1,000 sq ft house is about RM80,000 to RM100,000, and any contractor can do the calculations," he said when debating the Supply Bill 2016 at the Dewan Rakyat Tuesday.

Citing the Khazanah Research Institute report 'Making Housing Affordable', he said developers are willing to buy land at high prices as they expect to sell their products at higher prices.

"This means the soaring house prices do not reflect current value but demand from developers willing to buy land at high prices," he said.

Private developers have also been exploiting the definition of affordable homes to include 'affordable luxury' units costing RM500,000 to RM1 million, he said.

If supplying houses for the lower-income group is viewed only in terms of the welfare needs of people and not in terms of socio-economic development, Wan Mohammad Khair-il Anuar said, only the government would be building low-cost and affordable homes for the people.