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PETALING JAYA (Aug 27): The Selangor state exco has proposed to establish a taskforce that will examine the costs of residential property development to the point where the property is sold, reported The Star.

Selangor housing and urban living chairman Haniza Mohd Talha said the taskforce aims to thoroughly study costs incurred at each stage of development and how to reduce them.

"This may be wishful thinking but we would like to reduce house prices and to do that, we need to to look at things from a bigger picture. We need some transparency. How did the high costs came about?” she said.

According to her, some of the charges that affect the cost of developing homes may include land costs, labour costs, charges by utility companies, and premiums and charges levied by the municipal councils.

She added that each of the 12 municipal councils within the state had their own levels of charges, thus the taskforce must study the charges in detail to figure out the real compliance costs.

Other stakeholders that would be involved in the study include property developers, suppliers, contractors, utility companies, government agencies and the banking sector.

Real estate developers have regularly cited high compliance costs as one of the chief obstances to building more affordable housing.

Meanwhile, possible ways to bring house prices down include speeding up approvals of development orders, promoting the use of Industrial Building Systems to build faster with less labour, reviving abandoned projects and reducing profit margins – although this raises the question of what a fair amount of profit is for developers, she noted.

"What percentage of profit is fair for both developers and buyers? We understand that developers bear a risk when they build and the profit they get is the reward for taking that risk. But what is a fair level of profit?” she posed.

She also called upon developers to perform “national service” as they, along with buyers and the government, must each contribute to the nation's progress.

Haniza said the lack of affordable housing is a national issue but it is especially acute in the Klang Valley given the high number of rural folk migrating to the cities in search of economic betterment.

Citing cases of unsold units priced up to RM250,000, she explained that the lack of transport infrastructure and amenities have dampened the appeal of these modestly-priced properties.

Thus, the state will ensure that homes built under their Rumah Selangorku or other affordable housing schemes are “self-sustainable” and come with infrastructure and facilities.

She also pointed out that a majority of the population needing affordable homes are ineligible for financing as they lack the funds for a downpayment and a regular paycheque.

Rumah Selangorku schemes are priced between RM42,000 and RM250,000, with the actual price exceeding RM42,000, she said.

She also added that banks should not be afraid to disburse 100% loans.

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