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KUCHING, March 15: Low demand for properties owing to poor domestic consumption has forced developers to lower prices and to sell at a loss to cut further losses.
Batu Kitang assemblyman Lo Khere Chiang highlighted this in response to Democratic Action Party (DAP) Sarawak chairman Chong Chieng Jen accusing Sarawak United Peoples’ Party (SUPP) leaders of cheating people into buying houses in the PR1MA Housing project.
“It is completely irresponsible and presumptuous of Chong to make such an accusation,” Lo said while urging Chong to check his facts.
“Chong is trying to mislead the public into thinking that PR1MA, under the previous government, was making handsome profits. Poor demand is forcing PR1MA sell at a loss, a discount of 28 per cent from their original price,” he pointed out.
Lo said he also welcomed this reduction of 28 per cent by PR1MA Housing because the discount came from PR1MA, a federal entity, while the buyers who benefitted from this discount are all Sarawakians.
He observed that the economy has gone downhill after the General Election 2014 (GE14) in May last year. According to Bloomberg, Malaysia’s stock market is Asia’s only loser in 2019, so far.
“This is a factor that contributed to the low demand for properties. Normally, inflation takes place in a stable, robust and a growing economy. Prices of goods and services inflate due to growing demand for the same. Today, we see the development of an unwelcome economic scenario — deflation.
“This is the first time in many years that we have seen deflation in the market taking place.
“Prices of raw materials are still going up even as the ringgit weakened. The ringgit fell due to uncertainties with the new Pakatan Harapan (PH) government. The new government has given investors the jitters. So, when more ringgit moves out of Malaysia, demand for ringgit drops and the currency depreciates,” he elaborated.
Lo, who is also Padawan Municipal Council chairman, claimed that the PH government had made things worse as it had refused to fulfil or had delayed its election promises.
“A lot of U-turns and unfulfilled election promises by the PH govt has forced investors to shy away from Malaysia. Therefore, the ringgit is not strengthening even though oil prices are now on the uptrend,” he said.
Malaysia, he added, had spent billions bailing out companies like Malaysian Airlines (MAS), according to news reports from reputable sources like Malay Mail, Bloomberg and Asiaweek.
“The Wall Street Journal reportedly alleged that the Perwaja steel bailout was perhaps one of the biggest bailouts in the 1990s. And all these bailouts were done with money from Petronas — 30 per cent of Malaysia’s oil revenue from Sarawak.
“Sadly, today, the new PH government is still bailing out MAS. How many times do we need to bail out MAS? Shouldn’t we sell off MAS to the private sector and allow the private sector to run MAS efficiently so as to make a profit?” he asked.
If not for the 30 per cent oil revenue siphoned from Sarawak to benefit Malaya, Lo opined that the lack of competitive edge would have brought the ringgit even further down.
“An overall lack of confidence has seen international investors pulling out from our Malaysian markets as reported by Bloomberg,” he reiterated.
Ever since GE14, with the introduction of SST and the withdrawal of GST, Lo emphasised that public confidence appeared to have gone down and investments might have flowed out from the country and that was the most likely reason for the downward trend of the property markets. — DayakDaily