Property player hopes for easing of processes in new Budget

With the new budget 2019 to be announced on November 2nd, many are eager to find out the new updates on housing and development.

“As a property developer we are subject to pay various costs to local councils and various authorities and agencies. All these costs contribute to the Development cost of the intended project. One such cost is the cost relating to Utilities, which the developer has to contribute towards’’, said Ms Teh Lip Kim, Managing Director of Selangor Dredging Berhad.

For example – depending on the location of the land and the distance of the land to the point where water, electricity or sewerage can be connected or “tapped on” to; the cost of infrastructure – pipes or cables to connect to the utility service – are currently wholly borne by the property developer and can be a hefty sum.

“We believe that this infrastructure cost should be shared with the service provider, especially since these essential services are a necessity to residents who will eventually use these services and make payment directly to the relevant service provider”, Ms Teh added.

Another wish would be the easier process of applying for Bumiputera Quota release. The process for the release of Bumiputera units is currently made via an application for approval, after various stages of construction.  More often than not, this approval process takes many months and it would mean that property developers are straddled with units that they are not able to sell (until the approval is granted). As such, we need to make the process of release more efficient, for instance (when conditions are met) the property developer could submit a notice to release after the stipulated stage, rather than an application for approval (which generally requires a longer wait time).

The leaders of tomorrow are the younger generation. The younger generation is expected to carry economic growth forward in forthcoming years and, since a number of them struggle to own their own homes, the government should provide encouragement for them to realise this dream. In addition, to encourage new homeownership and to have a more robust property market, a policy should be introduced so that first time property purchasers are given a higher margin of financing or financed for a longer term.

Last but not least, for foreigners wishing to purchase properties the threshold of the cost of the property is currently set between RM1 million to RM2 million, depending on the state the development is in. To encourage more foreign direct investment, the selling price threshold should be lowered. This too would mean there is a more upbeat demand, stimulating both the property sector and market as a whole.

 

 

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