Developers urged to build more homes priced at RM250,000 or below

KUALA LUMPUR (Oct 14): The federal territories ministry has urged property developers to build more houses priced at RM250,000 and below.

“We have asked developers to lower the prices of their properties [in the future] to RM250,000 or below. This would help more Malaysians to enjoy a better standard of living without having to spend more than they can afford,” Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor told reporters at the groundbreaking ceremony for the 2.8km Pantai Sentral Park Interchange at the New Pantai Expressway (NPE) yesterday.

Based on Bank Negara Malaysia’s Annual Report 2015, a property is considered affordable if a household can finance it with less than three times its annual household income (house price-to-income ratio of 3 and below), suggesting that houses priced up to RM165,060 are considered affordable to a median Malaysian household.

However, only 21% of new housing launches in Malaysia in 2014 were priced below RM250,000, the report added.

Tengku Adnan’s suggestion was also directed at IJM Corp Bhd and its property development arm IJM Land Bhd, which is planning a residential development within Pantai Sentral Park in a joint venture with Amona Development Sdn Bhd. The proposed development features 490 units with a built-up of 850 sq ft and the remaining 406 units with a built-up of 900 sq ft.

However, Tengku Adnan has proposed the company standardise all the units to 850 sq ft and priced them at no more than RM245,000. This would mean IJM Land would have to “relook, replan and restructure the property’s layout plan”.

“We have principally agreed to standardise the size of every unit, but this would require us to replan the entire project. We need to restudy the layout,” IJM Land managing director Edward Chong Sin Kiat told The Edge Financial Daily.

Meanwhile, the Pantai Sentral Park Interchange will link the Pantai Sentral Park mixed development and the Pantai Dalam-Kerinchi area with the NPE.

“Upon completion, the interchange will position Pantai Sentral Park as one of Kuala Lumpur’s most desirable addresses for residences and businesses, due to its strategic location in the heart of the Golden Triangle connecting Kuala Lumpur, Bangsar and Petaling Jaya,” IJM Land said.

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This article first appeared in The Edge Financial Daily, on Oct 14, 2016. Subscribe to The Edge Financial Daily here.