Landbank fund for low-cost homes?

PETALING JAYA: The Urban Wellbeing, Housing and Local Government Ministry will propose the setting up of a fund to buy landbanks in strategic locations for low-cost housing projects in the 2015 Budget.

“I want to ask the prime minister and the Finance Ministry to consider providing funds to buy strategic landbanks in urban areas for the purpose of building low-cost and affordable housing,” said its minister Datuk Abdul Rahman Dahlan.

“Sarawak is doing it and Johor is looking into it. I am finding it increasingly diffficult to find good strategic locations to build our PPR (Projek Perumahan Rakyat).”

Speaking after the launch of the 17th National Housing & Property Summit 2014, here, Rahman said he plans to build one million affordable homes by the end of 2017.

Under the Perumahan Rakyat 1Malaysia (PR1MA) scheme in the 2014 Budget, the government allocated RM1 billion to build 80,000 houses costing 20 per cent below the market price.

In the first quarter of this year, average house prices have risen by eight per cent, compared with 10.7 per cent in the first quarter of 2013.

As at August 1, as many as 52,893 applicants have registered under the MyHome scheme, while 51 developers have applied to build 12,038 units under 55 projects.

Rahman also said the build-then-sell (BTS) policy should be made voluntary, instead of being mandatory, from January next year.

“Throughout the years, we have done a lot of studies on this issue. Some property developers have been doing this on their own, but we noticed that the challenges are even more for the smaller developers because they do not have the financial muscle, such as getting favourable rates from the banks,” he said.

However, National House Buyers Association (HBA) secretary-general Chang Kim Loong disagreed, saying the sell-then-build policy will allow developers to abandon housing projects after receiving full payments.

“Our proposal, which the government has agreed to, is to implement the BTS, and where the buyer pays a 10 per cent initial payment and settles the rest after the utilities are installed.”

Chang also said smaller developers should build within their own means to prevent abandoned projects.

~ By BUSINESS TIMES