Affordable housing not affordable to build

PETALING JAYA (March 11): Close to a third of 159 respondents to the Real Estate Housing Developers Association (Rehda) Property Industry Survey 2H2015 agree that the main issue with affordable housing is the increased overall cost of doing business.

According to Rehda president Datuk Seri Fateh Iskandar Mohamed Mansor who presented the survey findings to the media on Wednesday, he noted that for some construction materials, prices have stabilised but for other materials, prices have doubled.

“Certain materials such as steel and cement have stabilised and gone down from the period of January 2013 to December 2015. Some of the price increments such as for bricks are still manageable but materials such as sand have gone up by two times,” Fateh Iskandar commented.

The survey also noted some of the other challenges in affordable housing which include high land price, the need to cross-subsidise from higher-end properties, lack of incentives due to low density allowable, inconsistency with surrounding properties and inconsistency with the company branding.

In terms of cost of doing business, 61% of the respondents feel that the cost of doing business has increased by 10%, 36% say there is no change while 3% commented that it has reduced.

“In terms of cost cutting measures, some of our respondents reduced benefits and perks, froze new recruitment and retrenched staff from the operations’ sector while almost half of our respondents postponed their launches of planned projects and some reduced the scale of launches in the production/delivery sector,” he said.

Do not ask your doctor about the value of your home. Click here at The Edge Reference Price to find out.