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Monday, October 22, 2012

Location important factor for affordable housing

KUALA LUMPUR: Location is the most important factor where demand for affordable housing is concerned, a property consultant said.

CH Williams Talhar & Wong Sdn Bhd managing director Foo Gee Jen said during a presentation at CIMB Preferred’s 76th Financial Advisory Series that there was demand for affordable, but the Government would need to put location at the forefront where such property projects were concerned.

“There is always a mismatch when it comes to affordable housing. You can’t build 10,000 low-cost units in Bukit Beruntung even if you sell it cheap,” he said.

“You cannot expect someone who earns RM1,000 a month to live in Bukit Beruntung and work in Kuala Lumpur. The fuel cost alone will kill him. When I visited Iskandar Malaysia (in Johor), I saw affordable apartments that were ready for occupation priced at RM75,000. I was told sales were only 15%.

“There was a big ‘for rent’ banner showing RM300 and they are even providing a shuttle bus service. It is not only about building many homes. The public needs to know where.”

On the Government’s proposal to defray the cost of infrastructure borne by developers, Foo suggested that rather than providing subsidies, it would be better to limit the number of items that property firms had to contribute to.

“They (developers) even pay for the traffic light. There is such a long list. Consumers end up paying for all this.”

Prime Minister Datuk Seri Najib Tun Razak had said last week the Government was considering a model to help pay for infrastructure so that developers could sell houses below the market price.

“We can come up with a Government allocation to defray the infrastructure costs,” he said in an interview with Chinese radio station Melody FM, adding that developers interested in building affordable homes could approach the 1Malaysia people’s housing programme (PR1MA).

He added that PR1MA would be given unutilised government land to build the homes.

Foo also said there were many plots of land along the Sungai Buloh-Kajang line of the My Rapid Transit with potential to be developed into sites for affordable homes.

These include Kota Elmina near Sungai Buloh and government-owned real estate in Jalan Duta and Taman Suntex, he said, pointing out that they were underutilised in terms of plot ratio and density.

“If the Government is serious about providing affordable housing, it has to take care of the urban poor within this location, not at Kuala Selangor.”

On another matter, he said occupancy and rental rates for the condominium market was expected to stay depressed for the foreseeable future due to incoming supply.

In the first half of the year, the existing supply of serviced residences and condominiums numbered 22,000 but the average take-up rate in the capital was less than 2,000 units annually, Foo noted.

He pointed out that the KLCC area was particularly hard hit with occupancy and rentals heading “down south”.

“The year 2008 was the trigger point, and it has never really recovered. Prices are holding up but that does not correspond with rates and occupancy.

“Everybody is aware of the oversupply in KLCC. Land cost has become so high that developers who have obtained development orders cannot go ahead with their projects or launches.”

By The Star

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