KUALA LUMPUR: The definition of “affordable home prices” in the market needs to be addressed in a more uniform way, Real Estate and Housing Developers’ Association Malaysia (Rehda) Institute Chairman Jeffrey Ng said today.
Speaking to reporters at the Rehda Institute Post-Budget Commentary 2017, Ng pointed out that there were different definitions of “affordable homes”.
“The government has a threshold of RM300,000, some professional associations use RM400,000, while Rehda is saying RM500,000,” said Ng.
He explained that among the factors for this phenomenon was the location and land cost for the project.
Yesterday, Deputy Urban Wellbeing, Housing and Local Government Minister Halimah Mohamed Sadique said the government planned to streamline the prices of affordable homes throughout the country.
She said her ministry was preparing a working paper on this and would be presenting it to the National Housing Council.
Ng said Rehda Institute would also be conducting research into the same matter and hoped to get the results next year.
Earlier today, Rahim & Co Executive Chairman Abdul Rahim Abdul Rahman urged property developers to allocate at least 30 per cent of their projects for affordable housing.
The property consultant said many developers avoided developing affordable homes because such projects yield low profits.
Ng said it was a “misperception” that private developers enjoyed high profit margins.
“In the 1970s, developers used to enjoy a 30 to 35 per cent profit margin. Later, due to escalation of costs, it came down to between 10 and 20 per cent.”