House prices can be reduced up to 40% by offering bare units, says Rehda past president

Under the core housing concept, developers build and sell bare units which only have walls and other basic parts, he explained.

This will allow buyers to design and build the layout according to their needs and budget. “It will also help them save from unnecessary renovation costs,” he said at the 10th Malaysian Property Summit 2017 today, which was organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia.

Entitled "How to make the malaysian property market more efficient by bringing down prices and values for residential and commercial space in the long run to the lowest possible levels", the interview session with Ng was moderated by the organising chairman of the forum Elvin Fernandez, who is also Khong & Jaafar Sdn Bhd’s managing director.

Ng noted that Malaysians like to customise and renovate their houses by changing the layout and structure.

However, if buyers purchase a bare unit from developers, they can save on the renovation cost while developers are able to lower the selling prices.

"Core housing developments may be one of the solutions to reduce house prices in Malaysia. If the concept was implemented in the country, we can actually save a lot of money and take away 30% to 40% off the current selling prices," he said.

Currently, the house prices in the country are high due to the land cost, infrastructure and building cost, as well as compliance cost, he said.

The three major costs make up about 80% of total costs and the balance 20% will be the profit margin of a developer, he added.

However, he reckoned that it is very difficult to reduce the three major costs at the moment.

"The industry can lower the building cost with the use of the industrialised building system (IBS), but it is not easy to build with IBS now because there are a lot of considerations. For example, you will need a factory nearby and the right machineries to make it sustainable," he said. As such, he said the industry has to think out of the box to reduce house prices.

"Rehda has started to conduct research on how to bring down the prices, we will announce our findings in the future," he added.