Stan­dard quo­tas, prices for af­ford­able homes

> Min­istry pre­par­ing pa­per to be pre­sented to Na­tional Hous­ing Coun­cil

The Sun (Malaysia) - - MEDIA & MARKETING - BY EVA YEONG

KUALA LUMPUR: The Ur­ban Well­be­ing, Hous­ing and Lo­cal Gov­ern­ment Min­istry is pre­par­ing a pa­per to stan­dard­ise the quota and pric­ing of af­ford­able homes na­tion­wide.

“When pri­vate devel­op­ers have to build more low-cost homes ac­cord­ing to quo­tas set by state gov­ern­ments, they have to do cross-sub­sidi­s­a­tion from high end to low cost,” said Deputy Ur­ban Well­be­ing, Hous­ing and Lo­cal Gov­ern­ment Min­is­ter Datuk Hal­imah Mo­hamed Sadique ( pix).

“That’s why the min­istry is pre­par­ing a pa­per to be pre­sented to the Na­tional Hous­ing Coun­cil for us to stan­dard­ise the quota and price that is set by state gov­ern­ments,” she told re­porters af­ter launch­ing Rahim & Co Re­search’s sem­i­nar ti­tled “The Malaysian Prop­erty Mar­ket: Op­por­tu­ni­ties Amidst Un­cer­tain­ties” yes­ter­day.

Hal­imah said state gov­ern­ments have dif­fer­ent con­di­tions or quo­tas for af­ford­able homes. For ex­am­ple, in Ne­gri Sem­bi­lan, 50% of a pro­ject must be af­ford­able units while in Jo­hor the quota is 40%.

“We are pre­par­ing the pa­pers now. The chief min­is­ters also ac­knowl­edged the dif­fer­ences and have re­quested for it to be stream­lined... we hope to dis­cuss how to stan­dard­ise the val­u­a­tion of quota and house prices,” she added.

Hal­imah said house prices are not solely driven by the mar­ket and can be re­duced via cer­tain ac­tions not just at fed­eral gov­ern­ment level but also at state gov­ern­ment level, espe­cially in terms of land cost and land pre­mium.

“For ex­am­ple, if the gov­ern­ment or PR1MA wants to build houses they ap­ply for land from the gov­ern­ment. The land cost is de­ter­mined by the state gov­ern­ment, so if the state gov­ern­ment puts a high price tag at gov­ern­ment level, we ab­sorb the land cost and will not pass it on to buy­ers. But for the pri­vate sec­tor, some devel­op­ers will pass on the cost to buy­ers. “An­other thing is land pre­mium. Some­times it is very high, ac­cord­ing to mar­ket value. If there is ef­fort be­tween gov­ern­ment and pri­vate sec­tor to build more af­ford­able homes priced RM300,000 and be­low, the ini­tia­tive must be driven by state gov­ern­ments so that land cost and land pre­mium can be more rea­son­able,” she said. Hal­imah said these steps will in­cen­tivise the pri­vate sec­tor, which needs sup­port from the gov­ern­ment, to con­tinue build­ing more af­ford­able homes. It may also help to re­duce house prices as land cost and land pre­mium make up at least 75% of to­tal cost. In ad­di­tion, the min­istry is work­ing out the details for a rent-to-own pro­gramme for first-time house buy­ers. Those el­i­gi­ble will not need to pay any de­posit, and rental is con­sid­ered pay­ment to­wards own­ing the unit. “We are look­ing at the SOP for that pro­gramme, which we hope to start next year,” said Hal­imah. She said the gov­ern­ment is on track to achieve its tar­get of build­ing one mil­lion af­ford­able homes by 2018, with 723,000 units at var­i­ous stages of con­struc­tion now.

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