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Wednesday, September 5, 2012

Call for review of low-cost home quota

PETALING JAYA: Property developers are asking the government to review the 30-year old low-cost housing quota and allow them to build affordable houses on public land.

The are also proposing for an auto release mechanism for unsold Bumiputera properties as it is affecting their cash flow.

Real Estate and Housing Developers' Association of Malaysia (Rehda) president Datuk Seri Michael K.C. Yam said developers are suffering as the houses built on subsidies are eating into their profit margins.

The government, in 1982, imposed the 30 per cent low-cost housing quota on private sector developers as a social obligation. Developers have been building low-, low-medium and medium-cost houses, at prices that have been maintained at between RM42,000 and RM99,000 each.

"The government should do research as to how many units are really required. We think there is more than enough low-cost houses here. We understand some are not even occupied, while others own two to three units that are on rental.

"It shows the lower income group have the purchasing power and can afford better homes. For the hardcore poor, we suggest the government take on the role to do social housing and let developers focus on building medium to high-end houses," Yam said at a media briefing here yesterday.

He said the country's housing stock as at end-2011 was around 4.5 million units, comprising 1.04 million low-cost houses. Bungalows and semi-detached homes accounted for 402,000 and 296,000 units respectively.

Rehda is also requesting the government to establish an auto release mechanism for unsold Bumiputera properties, where the unsold units can be sold to other buyers six months after a project receives Certificate of Fitness.

"If we continue to hold the Bumiputera units, the burden falls on the developer and is passed on to other buyers through higher property prices," he said.

Yam said Rehda has presented the idea to the Ministry of Finance as one of its proposals to be included in the 2013 Budget.

The annual Budget is scheduled to be tabled in Parliament by Prime Minister Datuk Seri Najib Razak on September 28.

Meanwhile, Malaysian Resources Corp Bhd director Che King Tow is suggesting that the government offer incentives to developers to build affordable houses.

"Since the government is giving incentives to foreign companies to come here, why not give developers some tax free incentives to build affordable houses on public land. Developers can build 150 to 200 units," Che said.

"The best located properties are usually government-owned. The government has prime land along Jalan Duta and in Sungai Buloh. These locations are good for mass affordable housing. It is a political decision but it matters a lot to us," he said.

By Business Times

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