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Will this lead to lower property prices in the near future?

One of the causes always mentioned as contributing to high property prices is the compliance cost. This cost includes the building of facilities by developers for utility companies. Developers say that if the compliance costs are reduced, the property prices would go down too since they would no longer be passing the costs to buyers. They have a reprieve as per the National Housing Policy (NHP2.0) as announced by Housing and Local Government minister Zuraida Kamaruddin Click here for Article in Edgeprop.my here.  

This will be applicable for developer of affordable houses for the B40 group. To know who is B40, here’s an earlier article. For these projects, the utility companies will have to pay for their respective facilities such as water, electricity and telecommunications.  She added, “We do this in order to give more opportunities to build lower-cost houses so that our people, especially the B40 group can have access to homeownership.” In fact this new NHP 2.0 has already been approved by the Cabinet and the launching is soon. 

Within NHP 2.0, there are 5 key areas that it will be focused on, namely housing accessibility, together with home quality, facilities, financial accessibility and laws and regulations. For example, size wise, the space should be 900 sq ft or BIGGER. At the moment, 750 sq ft is the standard and this is uncomfortable for a family. She also explained, “Community empowerment is very important in this policy. We want the community to be responsible for their property and avoid vandalism. We want to make them understand that if you take care of your property well, the value of your property will definitely rise, thus giving you a good selling price if you sell the property.” Click here for Article in Edgeprop.my here.  

I think the 5 points in the NHP is extremely important. Home quality must be good enough to attract first-time home buyers who may have the wrong perception about affordable homes today.  Facilities I would like to point out that this will have to be complemented with maintenance plans. Else, better NOT build them. Financial accessibility wise, I prefer to be more cautious and please only lend to those who could actually repay them. Last but not least, we must have very strict enforcement because these homes are usually built with subsidy. This is for Malaysians, thus please make it work. Happy anticipating and buying that affordable home soon. 

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written on 11 Dec 2018

Next suggested article: Making maintenance good for future

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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