Malaysian developers laud subsidy for affordable homes

Malaysian developers laud subsidy for affordable homes

Housing developers are relieved that the construction cost for low- and medium-cost houses will be reduced with the introduction of the Private Affordable Ownership Housing Scheme (MyHome).

Those contacted said the measures announced in 2014 Budget last Friday, which included government subsidy of RM30,000 per unit, would encourage them to build more low- and medium-cost dwellings.

"This is positive for developers. Apart from the subsidy, the maximum prices have also been increased," said Mah Sing Group Bhd group managing director Tan Sri Leong Hoy Kum.

Mah Sing plans to explore the MyHome opportunity and identify locations within its housing projects suitable for the scheme.

Glomac Bhd group managing director and chief executive officer Datuk F.D. Iskandar also welcomed the Budget announcement.

He said the state governments should emulate the Federal Government's move to encourage developers to build low- and medium-cost houses.

"The government has been listening to us.

"They know we have been losing money.

"But rising construction costs is still an issue when it comes to state governments.

"The state governments, especially in Selangor, keeps raising the conversion premium rate.

"We have to pay 30 per cent enhancement value to the local council. We also have to pay for development and building charges.

"How are we going to keep cost low and houses affordable, when the cost keeps going up?

"The state governments are not in tandem with the Federal Government in solving this affordable housing issue."

He said developers were incurring losses of between RM35,000 and RM40,000 for every low-cost house they build in a housing project.

The government, in 1982, imposed a 30 per cent low-cost housing quota on private sector developers as a social obligation.

Developers are building low, low-medium and medium-cost houses, at prices that had been maintained at between RM42,000 and RM99,000 each.

In his 2014 Budget speech last Friday, Prime Minister Datuk Seri Najib Razak outlined five criteria for developers to fulfil under the MyHome scheme.

Among them are that developers must build at least 20 per cent low-cost houses and 20 per cent medium-cost houses in a housing project.

The houses are open to first-time buyers with a monthly household income of RM3,000 for low-cost houses and a maximum of RM6,000 for medium-cost houses.

The prime minister said preference would be given to developers who build low- and medium-cost houses in areas of high demand and limited to 10,000 units next year.

The MyHome scheme, which is limited to 10,000 units next year, is for housing projects approved effective from Jan 1.


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