Residential properties in Malaysia.
It’s hard to set a price range for low-cost housing as it varies depending on the location, according to IJM Corp Bhd’s CEO Datuk Soam Heng Choon, reported Bernama.
“You cannot say RM500,000 or RM300,000 is affordable across the board,” he said.
This is because the cost of affordable homes is usually higher in more mature locations like Kuala Lumpur, compared to less developed states like Perlis, where people have lower incomes and the land is cheaper, noted Soam, who is also Deputy President of the Real Estate and Housing Developers’ Association (REHDA).
For instance, certain locations require more medium-cost houses, while other areas need high-end dwellings. It is also not practical to build affordable homes in places where land prices are sky-high.
“For affordable houses, you should go a bit further. Or if the government wants them to stay nearer, the government should encourage developers by increasing the population ratio or density nearer to the city.”
In addition, there could a glut of low-cost housing if too many developers focus on building such units, he cautioned.
Many claim that it is easy to develop this type of property, but if too many are built, companies would struggle in disposing these units.
“Say if you open a stall and sell nasi lemak at RM3 a packet, people can afford to pay. If everybody opens a nasi lemak stall, how then? They will also close shop,” said Soam.
As such, he is urging the authorities to conduct a study on supply and demand to pinpoint which type of houses are needed in a particular locale, and if the people there can afford them.
“If supply is too little, prices go up. If supply is too much, prices come down, and nobody wants to go into this category,” he added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
