A concerned Malaysian writes about Malaysian affairs. "You are the Change you Seek" Barack Obama

Friday, August 24, 2007

Removal of Unlimited Discounts Will Help Housing Developers

It is good that the authorities are trying to keep housing affordable for the common folks and some people cannot even afford to buy low-cost houses that are now pegged at RM42,000.

Many of these are occupied by Malaysians who really struggle to make ends meet when costs of oil, tolls and even basic food keep increasing. It must be really difficult to surive on RM2000 per month these days if one lives in a city and has 2 or more school-going children. Some people even have to support aged parents who have already exhausted all their life savings; especially those who used their savings to finance their children's private education.

No doubt the cost of housing will rise and it will even affect the middle class but we should not worry too much about them as they can always "change their lifestyle".

One area that developers should explore is the blanket discount of 10% and above that must be given to Bumiputera buyers regardless of whether the buyer already owns 1 or 20 houses.

This policy is quite illogical as it means that many first time purchasers must in effect make up for all the discounts given to other buyers who may already be millionaires.

Often these lots remain unsold untill much later in the project and the extra holding costs translates into higher prices when the lots are released.

A fairer scheme will provide this discount only to a first time house purchaser and when a housing scheme is first launched, the Bumi first time buyers can be asked to register for the discount so that the developer does not have any lots that remain unsold untill late into the project.

I watched the Singapore PM's presentation on how the Housing Development Board plans to upgrade thousands of flats and it was quite impressive. If only our low-cost homes could have some of those facilities as provided for in our tiny dot neighbour.

Now if we only eliminate some of those billion RM bail-outs?

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