Brickbats and roses for early release of Bumiputera units in Perak

PETALING JAYA: Perak’s move to allow developers to release unsold properties under the Bumiputera quota within six months instead of two years has received mixed reactions from groups who differ over the effect this will have on consumers.NGO Gabungan Peguam Hartanah Rakyat said the move would only benefit developers.

Its chairman Salkukhairi Abd Sukor told FMT that the eventual release of all Bumiputera lots would cause an increase in prices as the properties would be sold to non-Bumiputeras.“It will be harder for Bumiputeras to afford them,” said Salkukhairi, whose group provides legal consultation in property matters. “In the long run, property ownership by Bumiputeras will also decline.”

He also cautioned that the move could result in a monopoly of certain residential areas by a single race, which might affect national unity. “For example, urban areas would be monopolised by the Chinese and Indians while rural areas would be monopolised by the Malays,” he said.

Yesterday, Perak Menteri Besar Ahmad Faizal Azumu said the move to relax the rules on the sale of unsold properties under the Bumiputera quota was to help developers who bear the damage and maintenance costs of these units.

Under the new rules, a developer may apply for 50% of the Bumiputera quota to be released if the properties have achieved 30% physical construction and if 60% of the non-Bumiputera lots have been sold.

An application to release the remaining 50% can be submitted once physical construction has reached 80%, and 90% of non-Bumiputera lots have been sold. The National House Buyers Association (HBA), however, welcomed the move saying such proactive initiatives should be emulated by other states in the peninsula as well.

“Housing developers will be able to factor in lesser holding costs and bring down house prices,” HBA secretary-general Chang Kim Loong told FMT, adding however that this was assuming developers do not “conveniently increase” their profit margin.

Chang said unsold Bumiputera units meant additional costs to developers, who would eventually pass these on to buyers.With the initiative, he is hopeful for a drop in house prices of about 5%.

Henry Butcher Malaysia chief operating officer Tang Chee Meng also welcomed the move, saying the unsold Bumiputera units were a big problem for developers. The new rules could help developers reduce their holding costs and pass on the savings to buyers, he said.

However, veteran chartered surveyor Ernest Cheong said the move would do little to resolve the main issue faced by the property market: the unaffordability of homes.

“For developers to sell their properties, they must offer big discounts, perhaps up to 30% because the main problem is that people just do not have the money to buy properties and are struggling with the rising cost of living. “The people will buy property again when the market corrects itself, and this will only happen after prices go down.”

Source : FreeMalaysiaToday