Despite a slowing luxury market and the increased demand for affordable homes, property developers in Malaysia opt to build the former considering the rising costs of land, labour and materials, reported Malay Mail Online.
Although there is no uniform price for a unit to be considered as “affordable housing”, it is generally within the RM300,000 to RM500,000 range.
“The land cost and building materials have risen in tandem over the years. Thus, in some cases it does not make a business sense to build house that fall within the affordable housing price bracket due to high entry cost that is associated with the development,” said Malaysian Industrial Development Finance chief economist Kamaruddin Mohd Nor.
Meanwhile, policies introduced by the government are sometimes counterproductive to its push for affordable housing, noted Knight Frank managing director Sarkunan Subramaniam.
Citing the decision of the International Trade and Industry Ministry to impose definitive safeguard duties on imported steel products for three years, Sarkunan noted that it was “not the smartest move” as it would inevitably raise house prices.
“I understand it is to protect the domestic industry, but by imposing such a policy in this current economic climate, it will require more capital to purchase steel bars and developers will have no choice but to increase property prices.”
To ensure the long-term sustainability of affordable housing, Sarkunan proposed introducing shell homes, which are bare-bones housing units without partitions and rooms but with basic wiring and plumbing.
While said units are currently prohibited by law, the savings by developers in building the units would enable them to market shell homes at a cheaper price.
Some construction companies at the Klang Valley revealed that a shell condominium unit are tens of thousands cheaper compared to a fully built unit and hundreds of thousands less than landed property.
“In the name of renovation, I have seen many people tearing down their whole place only to rebuild something completely different to what was given to them…So, why not just give them a shell and let them do what they want to do? This way, developers get to sell the property for a cheaper price and consumers do not need to spend a lot to tear down the whole place,” said Sarkunan.
Nonetheless, an effective solution would only be arrived at if the government and property developers work together to address the issue, said an international property management firm’s executive director.
“PR1MA and Rumah Selangorku are good but there need to be something more conclusive like how do we tackle with rising building materials, compliance cost, labour and the relevant policies?” added the chartered surveyor who requested anonymity.
Among affordable developments around are:
Image sourced from The Star
Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email radin@propertyguru.com.my
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