There are many reasons for Malaysians not buying affordable homes. One of the main reasons is because the affordable home projects are not near public transport stations. If this is the main reason, then there is good news.
Railway Assets Corporation (RAC) owns over 1,400 hectares of land in Selangor and there are several locations deemed having the appropriate size for affordable housing projects.
Transport Minister Anthony Loke says that affordable homes built at transportation hubs will enhance public transport utilisation and drive population and economic growth in surrounding areas.
He said such initiatives were in line with the government’s plan to build one million units of affordable homes within a 10-year period. Loke was speaking at the signing of a Memorandum of Understanding (MoU) between Menteri Besar Selangor Incorporated (MBI) and RAC.
The MoU will enable both parties to collaborate in developing strategic railway assets, focusing on trans-oriented development (TOD) including affordable homes as well as the implementation of Smart Selangor initiatives within transit hubs.
The land located near train stations is strategic and valuable and developing housing in such areas would likely bring huge returns to RAC.
Over the next few months, the MoU partners will be looking into the finer details. In fact, some land has already been identified for housing purposes, with Bangi being one of them.
It is important to ensure that the profits from these development projects on RAC lands be a recurring one. This is because once these plots of lands are sold, RAC will lose its assets yet will still have to continue to ensure public transport remains affordable for Malaysians.
Take Hong Kong as an example – The reason their MTR Corporation is profitable is not because of the ticket sales.
It is because they own many of the buildings built on those lands and they continue to enjoy good rental because these assets are built on strategic plots of land with good connectivity.
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.