Datuk Halimah Mohamed SadiqueKUALA LUMPUR (Nov 1): The Ministry of Urban Wellbeing, Housing and Local Government said it is working on a paper to be submitted to the National Housing Department (JPN) for the standardisation of land costs and the quota for low-cost housing, which differs between the different states in the country.

At a press conference today, deputy minister for Urban Wellbeing, Housing and Local Government Datuk Halimah Mohamed Sadique (pictured) said the rising housing prices in Malaysia has not only been driven by the market, but high premium on land purchases — which are set by the respective state governments — is also a major factor.

"The rise in house prices is not only driven by the market. Prices could be lowered if certain issues are dealt with, such as land costs and land premium charged by the state government on land purchases," she said, adding that land costs make up about three quarters of the cost for a development project.

Halimah said the higher costs incurred in purchasing land from the state governments proved to be a hindrance to the federal government in developing low-cost and affordable homes, adding that this is also a gripe faced by private property developers.

"If the federal government sees this as a challenge, it's even worse for private developers. When the developers have to meet the quotas for low-cost housing — set by the state government — they also have to consider the cross-subsidisation of the low-cost units.

"That's why, one of the steps taken is the ministry is preparing a paper for JPN to standardise the [low-cost housing] quota and land cost between states through the respective state housing policies, because these are set by the state governments," she said.

She explained that although all states agree on the affordable housing price range of RM300,000 and below, the quota for low-cost units — priced between RM42,000 and RM200,000 — still varies between the states, for example 30% for Selangor, 50% for Negeri Sembilan and 40% for Johor. — theedgemarkets.com

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