Low cost homes no longer being built in Sabah

KOTA KINABALU - The government's announcement of RM30,000 subsidy for low cost houses costing RM70,000 will not fully benefit Sabah where houses at such prices are no longer in existence.

Sabah Housing and Real Estate Developers Association (Shareda) President Francis Goh said traditionally, low cost houses were built by the Sabah Housing and Town Development Authority (SHTDA).

However, low cost houses were no longer being built in Sabah since the construction cost had gone up higher than the selling price due to rising land and construction material price.

"In view of the expensive land, material and labour which is about 30 per cent higher than in Peninsula Malaysia, all members of Shareda and most government housing agencies are only able to supply affordable homes at the range of RM150,000 to RM250,000 in Sabah," he said.

"Shareda was of the opinion that even though the government has announced a high subsidy for people to purchase home but it will still not able to solve the root problem of owning affordable houses in the country," he said.

Goh said Shareda fully supported the National Housing Council's (NHC) noble effort in trying to assist the lower income group to own home under the MyHome scheme but it would be better if it was extended to those in the medium income bracket as well.

He said those in the medium income bracket or earning about RM5,000 monthly also faced similar problem in buying houses while they are also the biggest contributors in term of income tax paid to the Inland Revenue Board.

Taking into consideration the obstacles including tight conditions set by commercial banks that often confronted home purchasers from the lower income group, he said Shareda proposed to the NHC to give the subsidy in the form of 10 per cent deposit but only for first time house buyers.

"Providing the subsidy in the form of the 10 per cent deposit will solve the problem of many purchasers from the lower income group in sealing the sales and purchase agreement due to difficulty in securing the 10 per cent deposit.

"The subsidy could be paid to the housing developers account once the buyers have secured bank loans for the 90 per cent payment," he said.

Shareda also proposed for a policy to make it mandatory for all commercial banks as well as Bank Islam in the country to provide loans to all first time house buyers.

All this while, housing developers in Malaysia had been helping the government by complying with the quota of building low cost and medium cost houses.

At the same time, the commercial banks only collected profits from the housing developments without doing any corporate social responsibility and give incentive or facility to the needy to own homes, he said.

It must be understood, he said that about 50 per cent of the bank's profits depended on housing transactions including bridging loan.

With more than 3,000 branches of commercial banks in Malaysia, each bank should be given a quota of approving housing loans for 335 units each in order to achieve the government's target of one million home purchasers.

Shareda believed that the government's promise of building one million affordable homes would not be fulfilled if the developers and government agencies could not market their products because the buyers failed to secure loan from the banks.

In this respect, Goh said Shareda agreed with the National Chamber of Commerce and Industry Malaysia for the setting up of a housing bank in order to ease the burden of low-income earners.

The chamber had said that out of 50,000 low-cost houses that had been completed only 7,000 were sold.

Meanwhile, Goh said Shareda also objected to the proposed Property Investor's Club in Malaysia because it would hurt the market and prevent genuine property buyers from making a purchase.

Shareda felt that the Registrar of Societies (RoS) should not allow the club to conduct its activities of prospect buying which as a result might see them gaining higher profit than the developers.

As for affordable homes in Sabah, Goh said Shareda had promised to the State Local Government and Housing Ministry to build 10,000 units and this year, 2,000 units would be built in Tuaran, Kota Marudu and Beaufort.

The proposal was presented during the meeting with Urban Wellbeing, Housing and Local Government Minister, Datuk Abdul Rahman Dahlan on the MyHome Scheme among others after Shareda was appointed as a member of the NHC.