THE state government together with the Penang Development Corporation (PDC) will carry out eight affordable housing projects, said state Housing, Town and Country Planning Committee chairman Jagdeep Singh Deo.

“Three projects will be on the island and five on the mainland.

“The projects will provide nearly 20,000 affordable housing units with the price ranging from RM72,500 to RM400,000.

“The three projects on the island are SP Chelliah (1,900 units), Teluk Kumbar (696 units) and Jelutong (556 units).

“The five projects on the mainland are Kampung Jawa, Butterworth (707 units), Ampang Jajar (1,634 units), off Jalan Berapit (1,000 units), Bukit Juru (800 units) and Batu Kawan (11,800 units),” he said in a press statement yesterday.

Jagdeep Singh said the provision of affordable housing was a paramount consideration and a priority for the state government.

“The statement by (state Umno secretary) Datuk Musa Sheikh Fadzir that affordable housing was not a priority for Penang is unfounded and without basis.

He was responding to a news report quoting Musa as saying that in Penang and Selangor, the young of the middle and low-income classes were unable to purchase homes as property prices had skyrocketed.

Musa had said this after attending the state National Drug Agency’s Hari Raya open house in Penang on Wednesday.

Jagdeep Singh said the commencement of work on the Teluk Kumbar project was scheduled to be end of this year.

“Apart from this, from 2008 until June 2013, planning permission for 11,910 low-cost housing units and 7,776 low medium-cost units have been approved and are in the process of being built by the private sector,” he said.

“The state government has also implemented a policy whereby developers of housing projects will have to allocate at least 5% units costing not more than RM200,000, 15% units not costing more than RM300,000 and 5% units not costing more than RM400,000 for those eligible under this policy,” he added.

He also said the Selection Process Enhancement Committee now sits at least once a week to select applicants for low-cost and low medium-cost units so as to reduce the number of applicants on the waiting list.

Source: StarProperty.my

People looking to own a house any time soon will have to pay at least 10% more for their dream home, according to developers.

They said the increase was due to the double whammy that has hit the construction industry – higher costs of building materials resulting from the 20 sen rise in the price of RON95 petrol and diesel and absenteeism among foreign workers because of the nationwide crackdown on illegal immigrants.

Real Estate and Housing Developers Association of Malaysia president Datuk Seri Michael Yam Kong Choy said the failure of foreigners to turn up for work was causing delays, thus adding to costs which contractors were certain to push to consumers.

He added: “The raids on construction sites have frightened even legitimate migrant workers who are staying away.

“This also happened in past raids, Legitimate migrant workers simply did not turn up for work or delayed their return from their country until the storm blew over.

“Because of the shrinking supply of workers, developers have to pay more for labour to meet contractual deadlines, failing which they will be penalised.”

Developers are bound by the Sales and Purchase Agreement and will have to pay compensation to buyers for late delivery, Yam said, adding that contracts in the private sector were awarded with no provisions for price adjustments.

While acknowledging the need to flush out illegal immigrants, he said any reduction in the number of workers would hurt developers.

On the fuel price hike, Yam said it affected the supply chain of the construction industry, involving more than 100 types of business.

Master Builders Association of Malaysia president Matthew Tee said members were complaining that their legal workers whose documents were being processed were staying away for fear of being arrested.

“Our understanding is that all foreign workers will be detained unless they can prove that they have proper documentation,” he said.

“This can be difficult as their documents may still be with their employer or immigration pending the affixing visa of stickers by the authorities.”

He added that there had been cases in the past of legal workers being detained for up to 14 days.

Tee hoped that there would be no recurrence of such instances, and warned against a repeat of the situation in 2002 when the construction industry was brought to a standstill due to a shortage of workers.

In George Town, the Penang Master Builders and Building Materials Dealers Association says it expected construction costs to rise by 3% to 5%.

Association president Datuk Lim Kai Seng said the cost of transportation was likely to rise 10% to 20%, and the prices of sand and cement by between 5% and 10%.

He said that cement now cost RM17.50 per 50kg while sand sold for RM70 per cubic metre.

Source: StarProperty.my

Property developers say increasing house prices are due to high compliance and construction costs.

They also attribute the rising cost to government agencies, especially local authorities and utility companies, said Real Estate and Housing Developers’ Association Malaysia (Rehda) deputy secretary-general (Melaka branch) Datuk Anthony Adam Cho.

According to Cho, the total development cost of a project can be reduced by around 20 per cent if the compliance cost is lowered.

The development cost of a project is based on five factors, namely construction cost, land cost, compliance cost, interest for borrowings and developers’ profits.

In most cases, the development cost is about 70 per cent to 80 per cent of the project’s total gross development value, Cho said.

The biggest cost is construction, ranging between 50 per cent and70 per cent of the total project. Compliance cost takes up about 15 per cent to 25 per cent, he said.

Compliance cost includes levies and contribution to authorities, and building infrastructure for utility companies within the project, Cho said.

Developers are also required by Telekom Malaysia Bhd to incur between RM4,000 and RM6,000 per unit to install high-speed broadband infrastructure in their projects, or risk their development application being rejected by the Malaysia Communications and Multimedia Commission.

“Our margins are squeezed also because of the Bumiputera cross subsidies on discounts and low-cost houses. The more expensive the unit, the more discount is given. The poor is basically subsidising the rich.

“We hope the government will review the housing quotas and discounts allocated to Bumiputeras, and also look into other matters relating to property development, which can help to lower the overall cost of doing business,” Cho said at a media briefing yesterday. Sharen Kaur

Source: Business Times

Royale Infinity, part of Tambun Royale City development by Jadi Group in Bukit Minyak. It is strategically located along Jalan Perindustrian Bukit Minyak and mere minutes drive to Bukit Tambun PLUS interchange.

This development comprises 3 blocks of apartments with unit size ranging from 700 sq ft studios to 1,480 sq ft family suites. The apartments will include a breathtaking 40m cliff-hanging infinity pool in addition to a multitude of other facilities.

Property Project : Royale Infinity
Location : Bukit Minyak, Penang
Property Type : Residential Development
Built-up Area: 700 sq.ft. – 1,480 sq.ft.
Developer : Jadi Group

Measures to curb speculation in the property market and cross-subsidisation do not make for a healthy property sector in the medium to long term, according to the Real Estate and Housing Developers’ Association of Malaysia (Rehda).

Rehda president Datuk Seri Michael Yam drew attention to the affordable housing segment, which suffers the brunt of such measures like the real property gains tax (RPGT) as well as the impact of cross-subsidisation from the low-cost segment.

“Property speculation is in hotspots, not among the affordable housing community, but if the Government continues to have tightening measures, then it could affect 95% of the market,” he said at Rehda’s 2013 first-half property industry survey, noting that the secondary property market, for example, would not be able to sell well.

“We need to examine carefully the various categories of buyers and speculators and prescribe a more focused action plan against the right people,” he said, explaining that the broad brush-stroke approach of dealing with speculators had unjustly impacted other asset classes as well.

Past president Datuk Ng Seing Liong added that the hoo-hah about property price hikes was not reflective of the whole market, as steep rising prices occurred only in certain hotspots.

“Price hikes in these hotspots were reflected in the media and then caught by house buyer associations, which started asking the Government to clamp down on property speculation via the RPGT and other tightening measures,” he said, “Remember, these people are buying into a lifestyle, and hence, the price has to go up.” Ng noted that there were reasonably priced basic houses out there and that there was supply in the secondary property market. “The choice is still with the buyer, they should not just claim that prices keep going up.”

He also commented on the build-then-sell (BTS) mechanism, which he believes will negatively affect house buyers in the end, as supply falls subsequently.

“With BTS, when we start restricting supply, house prices would go up.”

Aside from the curbing measures, Yam also pointed out a need to revise the cross-subsidisation, which has also led to swelling property prices across the board.

“The low-cost subsidised housing is sold for RM42,000 when the building cost is RM100,000. So, who is paying the difference? The subsidy is passed through to other housing categories and subsequently, those who buy in these other categories,” Yam said, adding, “Thus, prices have gone up.”

To address this issue, he recommended that the Government focus on affordable housing, which could be built without a loss so that developers need not pass the cost to other buyers. “Now that low-cost housing is no longer required, the Government should focus on affordable housing, be it through the 1Malaysia Housing Programme, or PR1MA, or even developers,” he said.

Source: StarProperty.my