This is a good challenge and it should be reported by all medias. Datuk Francis Goh, the President of the Sabah Housing and Real Estate Developers (SHAREDA) said that one major contributor to housing price increase is because of the delay in development approval. In fact, he outlined clearly why if the development approval is fast-tracked, it can possibly reduce housing prices by 10 percent.
Currently, developers have to wait for two and a half years for their development plans to be approved. This increases the cost for the developers. For example, the holding land cost. Of course, these costs would be priced into the final selling price. He suggested that the approval should be shortened to between six and 12 months and this would translate into a five percent cheaper price. Another 3 percent would be reduced if Sabah Electricity Sdn Bhd (SESB) can give developers a waiver in capital contribution. Another 2 percent comes from the overheads which could be saved.
Personally, I do not doubt that prices can be reduced but by what percentage, I think it would still very much depends on the demand and supply situation and not just due to these approvals. However, faster approvals definitely have many other benefits too. The development can be faster. Thus, supply can also be increased and competition too which meant developers would have to think harder when they price their products. Faster approvals also meant that the developers do not need to try any ‘under table’ tricks to fasten it. Last but not least I think the current two and a half year is way too long. If we are really aiming to be a developed nation, all these unnecessary delays and processes should be streamlined. Of course, this applies to ALL states in Malaysia and not just Sabah.
written on 14 Mar 2015
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