REHDA Positive about Government’s Initiative on Housing PPP

Petaling Jaya, 6 May 2011

REHDA views the announcement of the new public-private-partnership made by the Prime Minister Datuk Sri Najib Tun Razak today as a noble initiative to assure the rakyat of availability of housing below RM220,000. The Prime Minister’s commitment to provide land at no cost to private housing developers is a positive sign that the Government is serious in making affordable housing more available.

“Depending on building types, land generally constitutes only 20% of the total GDV, whilst construction, professional fees, utility contribution, interest cost and cross subsidies make up as much as 60 to 70 per cent. Although in this new programme, land costs are borne by the public sector, several more measures need to be taken to ensure that properties fall within the RM220,000 threshold, especially within Klang Valley and Penang,” said Datuk Seri Michael Yam, President of REHDA.

Private developers may need to consider producing units of smaller build-up, and most of these would be high-rise units for scale. Furthermore, the impact of industrialized building systems (IBS) in bringing down costs may not be significant, as Malaysia’s current usage of IBS has not yet achieved economies of scale such as what Singapore is experiencing.

“REHDA and its members look forward to working with the Government and its agencies to explore all angles to achieve the aspirations of the Prime Minister on this initiative. We are keen to know and understand better this view from the Prime Minister, and we are eager to dialogue with the Government on the details of the actual implementation of such a programme with the input of our members who have the experience to contribute.”

Issued by:

Datuk Seri Michael KC Yam SMW, DSNS
President
Real Estate and Housing Developers’ Association Malaysia