PENANG property developers will adopt a “wait-and-see” approach in rolling out new property projects next year in view of various factors, including rising power costs, fuel subsidy cuts and house buyers’ cautious stance.
The Real Estate and Housing Developers Association (Rehda) has expressed concern over bureaucratic red tape involved in obtaining developers’ licences and advertising permits for new launches, in addition to being saddled with rising construction and compliance costs.
Rehda Penang chairman Datuk Jerry Chan yesterday said Penang developers have to contend with not only making the biggest contribution to infrastructure, drainage and non-delivery of low- and low-medium cost homes, but also of high land costs, especially on Penang island.
“Since August, the issuance of advertising permits for new launches is taking longer than two weeks and run up to more than two months, while plans for fire safety now have to be vetted by the Ministry of Housing and Local Government as opposed to local council previously,” he said.
Also present was IJM Land northern region general manager Datuk Toh Chin Leong.
“We are cautious and will launch our new projects accordingly next year as house buyers appear to be cautious and there is still confusion over the effects of property prices once the Goods and Services Tax is implemented,” said Toh.
Chan said Rehda is disappointed with the lack of incentives for private developers to build affordable housing and the lack of measures to lift the soft property market since cooling measures were introduced in 2014 Budget.
“The 50 per cent stamp duty exemption for properties up to RM500,000 until December 31 2016 will help ease home ownership cost. However, full exemption would be more helpful for the first time buyers in view of property prices, particularly in Penang, Johor and the Klang Valley.”
He said apart from having to fork out the higher charges for property development in Penang compared with the rest of the country, developers are faced with high land prices.
“With these kind of costs, it is tough for property prices here to come down and the future trend for low-cost and low-medium cost housing would be to make them smaller,” Chan noted.
He expressed Rehda’s concerns over the availability of financing for affordable homes in Penang.
“We do not want a situation where affordable houses are built and buyers are unable to purchase them if financing does not come through.”
Chan said some projects have started work and will be completed in three years.
“Rehda shares the government’s vision and mission of providing adequate, quality and affordable housing for the people. One of the ways is reviewing residential property plot ratio guidelines further to allow developers to bring down the cost of building, thus provide more affordable housing for the people of Penang,” he said.
~ By BUSINESS TIMES
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