Release of Bumiputera quota after 6 months will help move unsold units

One major concern on cashflow for developers would be the number of unsold units. Beyond just money, cashflow issues will mean the delay of their next project.

For some developments, the Bumiputera quota is something they need a solution to. To a developer, they just want to sell all the units and then focus on their next project.

According to an article in edgeprop.my, Perak Menteri Besar Datuk Seri Ahmad Faizal Azumu said that from April 1 this year, housing developers in Perak will be allowed to apply for properties under the Bumiputera quota to be released to other buyers if it remains unsold by the Perak Housing and Property Board (LPHP) within six months.

He said that the time frame reduction to six months was to ease the burden on housing developers.

He added, “If the properties are unsold after six months, the developers may apply for 50% of the Bumiputera quota to be released to other buyers, on the condition that the properties have achieved 30% physical construction and 60% of the non-Bumiputera lots have been sold.

“They may apply for the remaining 50% to be released after physical construction has reached 80% and 90% of the non-Bumiputera lots have been sold.”

He also announced that the ceiling price for “Rumah PerakKu I” and “Rumah PerakKu II” will be increased so as to attract private developers.

“The prices of Rumah PerakKu I houses will be increased from RM70,000 to RM90,000 and from RM140,000 to RM180,000 for Rumah PerakKu II houses.

“In line with the price increase, the minimum build-up of Rumah PerakKu I houses in zone A will be increased from 860 sq ft to 900 sq ft,” he added.”

Frankly, when it comes to property, it’s extremely important to make the units big enough so that a couple who buys it can continue living there even after they have a bigger family.

The price difference between RM140,000 and RM180,000 is RM182. The potential gain is however much more because these homes could be built with better specs too.

Let us be reminded that when a home is too shoddily built, the maintenance fees will be far higher and for the owners, the value of the property will not appreciate either. This means that the price cannot help them hedge against inflation.

Just look at the HDB flats in Singapore. They were so well built that over the years, some flats have risen in price, even hitting SGD 1 million.

This article first appeared in kopiandproperty.com

Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.