If the cabinet approves the new affordable housing policy, builders of such residential properties can look forward to lower compliance costs next year, as they may no longer need to fund utility facilities for water, power and telco firms, reported the Sun Daily.
“By 2019, the new housing concept will have this cost reduction. The cost (for building utility facilities) will not be imposed on affordable housing developers,” said Housing Minister Zuraida Kamaruddin during the 2018 Housing Conference organised by REHDA Institute on Wednesday (10 Oct).
She explained that her ministry wants utility firms to build their respective infrastructure base likewise for government agencies. “At the ministerial level, principally, they (utility companies and gov’t agencies) have agreed to take up the costs.”
At present, developers are required to shoulder the cost of building power firm Tenaga Nasional’s (TNB) substation at their residential projects.
Zuraida said land prices and compliance costs to utility firms account for around one-fourth of the total cost of a house, so substantial savings can be achieved if compliance cost is removed.
Moreover, Zuraida revealed that her ministry wants to limit the prices of affordable housing to RM500,000, depending on the resident’s median income and the development’s location.
They also want low-cost units to come with facilities, and its size should be increased from 650 sq ft currently to more than 850 sq ft.
According to REHDA Institute chairman Datuk Jeffrey Ng Tiong Lip, public utility companies have shifted the burden of building their facilities to home builders. But if they are made responsible for funding such facilities, home prices can be reduced.
REHDA Malaysia Deputy President Khor Chap Jen also said that private utility firms such as Syarikat Bekalan Air Selangor (SYABAS), Indah Water Konsortium TNB and Telekom Malaysia should not be permitted to levy capital contribution charges to developers, as they already need to build utility facilities and bring more clients to such companies.
“These utility companies should revise their own capital to be recovered via tariff based on consumption or through federal funding from general taxation.”
“Similarly, requirements for huge amounts of deposits should be reviewed as such deposits are adversely impacting project cash flow of small, medium and bigger sized developers alike. The impact is especially felt more severely by the bigger player as they undertake projects with bigger gross development value and they may have many ongoing projects at any particular time,” added Khor.
Image sourced from Malay Mail
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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