Property developers urged to disclose cost of development

BANGI: Valuation and Property Services Department directorgeneral Ahmad Zailan Azizuddin has called for government intervention to ensure property developers disclose their costs in property developments.

This move is to reduce differential valuations by the Valuation and Property Services Department and private property valuers.

Ahmad Zailan said the government should have a strong policy in place and the commitment to ask property developers to reveal the actual costs of property developments.

“In a way, it may be practical for affordable housing projects. The government has intervened in terms of what the components of the costs are, and where we should get the ingredients of the cost. All must be transparent, especially from those who build the houses,” he told reporters after the launch of the Malaysian Property Market 2018 reports by Finance Minister Lim Guan Eng yesterday.

Ahmad Zailan said there are various methods and standards of valuation practice in Malaysia based on the market comparison approach.

“In the valuation profession, the cost depreciation method is our last resort because cost is not equal to value. Cost and value are very different, cost may be higher than value or lower than value,” he said.

Earlier, Lim called for a transparent method to ensure the gap between the property valuation by the department and private property valuers is not too big.

“Maybe in terms of methodology, some quarters feel we should not use the comparison method but rather the cost depreciation method. But let this matter be discussed first before it is finalised,” he said in his speech.

Lim added that frequent discussions should be held between the department and private property valuers.