Tuesday March 19, 2013
Sheda reps to meet minister on specifications for affordable houses
By YU JI
KUCHING: When is a house renovation not an upgrade but an attempt at boosting prices? That is a question the Sarawak Real Estate Developers’ Association (Sheda) would like answered.
Sheda representatives will this week meet state Housing Minister Datuk Amar Abang Johari Tun Openg for clarification, following the minister’s comment that renovations offered to prospective affordable house buyers could be illegal.
Sheda secretary-general Sim Kian Chiok told The Star yesterday that developers wanted clearer building guidelines on the specifications for low-cost and low-cost plus houses.
“We do want to know the guidelines. At the moment, it’s hard to be specific (about requirements). I can only provide general answers,” Sim said.
Sheda is also expected to assert at the meeting that it is not wrong for developers to offer renovations, with additional costs, at the time of purchase.
Under state rules, developments larger than 4ha have to comprise about 30% affordable units. The state government has also set price ceilings between RM50,400 and RM80,000 depending on house type.
But Sim said building cost were substantially higher.
“There are only two sources of affordable housing in this country. It’s either from the private sector or government-linked companies and bodies. When the minister announced new higher prices recently, he said that the ones built by the Government would each be subsidised by about RM90,000. That shows the Government knows how much building cost actually is.
“There are different views on how we can address the matter. A popular view is that the prices could be raised again to better reflect actual building cost. However, it is also our opinion that the private sector should not be made to build affordable housing. That responsibility should lie with the Government,” Sim said.
For decades, developers have passed on the cost of building affordable units to medium-cost house buyers. Sim said the policy meant there was an indirect tax on new house buyers.
Developers are also offering renovations that require supplementary agreements to offset the high building cost. Although this should not be illegal, it means the actual number of affordable houses at between RM50,400 and RM80,000 are fewer.
The policy also means that the rate of new affordable housing is directly related to the number of new medium-cost houses sold.
“When medium-cost houses don’t sell well, developers are hesitant to build low-cost units,” Sim said.
In his comments last week, Johari implied that developers would be allowed to continue with the practise of offering renovations, as long as buyers who did not want to upgrade were still allowed to purchase the houses.