Let’s get the first question out of the way. Will huge numbers of affordable home crash the property market? No. Huge numbers of really attractive and affordable homes will stabilise the market because there would be by far more choices for everyone instead of the current situation where the demand for certain hotspots far outstrip supply, pushing up prices. I call it Location Supply Scarcity Too many people love too few areas and within those few areas, there are even fewer units up for sale. Every time a transaction happens, the price inched upwards. Imagine what happens after 10 transactions in a year? Yes, I seriously welcome more affordable and attractive homes. Every Malaysian should have a home, especially the M40 and the B20. Who are they? Earlier article here. Frankly, without a home, it is seriously tough for them to hedge against inflation. At least with a home, they have something at the end of their working life. What will happen to a RM300k home every year? Here’s an earlier article: RM300k property versus just increments
According to an article in edgeprop.my, a lot more affordable homes may be coming. Transport Minister Anthony Loke shared that the Ministry of Transport (MoT) is planning to develop affordable housing projects on Railway Assets Corp’s (RAC) 9,192 acres of land to generate better returns for the company. He said, “I have requested for RAC to come up with a list of their lands that are available for development by this Friday and I will submit the list to the Cabinet next Wednesday to seek approval for developing the lands. Once we have gotten the approval, we will then call for open tenders for the lands.” He added that the lands should not be used for office blocks but should be for affordable housing projects to allow more people to live nearby the railways and use public transport to commute to work.” (NOBLE goal for Malaysians indeed. Let’s keep following from this announcement yeah.) RAC owns a total 31,712 acres of land along the KTM railways as well as pockets of land in prime areas, of which 9,192 acres are available for development, while the remaining 22,520 acres are reserve land.
He then said this, “If RAC is able to generate more income through unlocking the value of its landbank, it will have more flexibility to develop our railway service and provide better service to the public.” (THIS IS THE BULLSEYE. Frankly, public transportation company running just public transportation will be at a loss most of the time. In brief, can the fares be increased after the first year? Most of the time, it is increased only after many years! At the same time however, the company must still give increments to the staff, must still maintain the services and this is getting expensive year after year and the company must even handle customer complaints and spend money to resolve them even though the fares could not be increased! Hong Kong’s MTR is profitable because it has the property development and management business as well. Who knows, we may have this in the future with RAC? Do read the full article here. Yes, I think our new Transport Minister has done his homework well. If he reads this article and needs my inputs, please tell me yeah. Haha. Happy pushing for a ‘profitable’ RAC.
written on 26 June 2018
Next suggested article: Boosting the market? better educate and ‘fight back’ lah