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Wednesday, August 15, 2012

Making way for affordable homes

REHDA’S CALL: Government should free up some land for construction of affordable homes to ease pent-up demand

The government must free some of its land to make way for affordable homes to address the current pent-up demand situation.

Real Estate and Housing Developers Association Malaysia (Rehda) president Datuk Seri Michael Yam Kong Choy said it must act now before the situation becomes critical.

"As of now, Malaysia needs 180,000 homes a year but the industry can only supply 100,000 units. One of the many ways to counter this problem is to identify federal or state lands which can be converted into affordable housing schemes," Yam told reporters at Rehda's headquarters here yesterday.

Yam was presenting a paper at the roundtable discussion on "Housing Affordability - Issues and Challenges", launched by Housing and Local Government Minister Datuk Seri Chor Chee Heung.

The land includes sites of government quarters, public golf courses or land after the relocation of residential schools and zoos.

"We need to shift development focus of government-owned land to affordable housing, instead of commercial projects such as the Rubber Research Institute land in Sungai Buloh, Pudu jail and the Sungai Besi airport.

For immediate action plan, focus must be given to build affordable homes, from low cost with prices ranging between RM150,000 and RM350,000.

"There should be no more low cost quota. Government must provide social housing or transit housing for the hardcore and urban poor."

Yam said for planning control, the industry should be allowed higher plot ratio to enable the development of smaller units.

Developers should be given incentives for projects in public transport and transit areas with higher density/plot ratio.

To address issues of increasing cost, the sector must be free of new compliance costs, more certainty in Bumiputera quota release system, faster approvals and freeze imposition of policies or guideline laws that add to the cost of development.

Financing must be cheaper for the first time buyer and more tiered payments where homebuyers can pay less now and gradually pay more later (to be reviewed every five years).

For loan applications, housebuyers must be given more flexible criteria and not merely focus on net income.

Yam said the government should assist buyers with acquisition costs such as lower stamp duty for affordable homes.

As an example, a stamp duty of 0.5 per cent for the first transaction rate of RM300,000 compared with one per cent at the moment for the first RM100,000.

Another action plan is to make connectivity to urban areas more accessible, improve public transportation system and reasonable travelling distance to place of work.

For the medium to long term plan, the government should refurbish existing buildings such as public low cost houses, council homes and government complexes to affordable homes.

The Malay reserve land or new villages can also be new potential sites for affordable housing as well as building over existing transport infrastructure such as high rise apartments over LRT (light rail transit) stations or over KTM Komuter routes.

By Business Times

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