save malaysia!
Govt proposes panel to monitor cost components of houses
savemalaysia
Publish date: Thu, 11 Oct 2018, 06:03 PM
KAJANG: The Valuation and Property Services Department has proposed to set up a committee to monitor the different cost of components which determine the prices of houses.
This is in view of persistent affordability issues and rising overhang which stands at 29,227 units worth RM17.24bil as at June 33, 2018, its director general Nordin Daharom said.
Daharom is offering the department to be part of the committee which, he said, comprises the National Housing Department, Construction Industry Development Board, the Housing and Local Government Ministry and the technical department of the ministry.
“It can also include the Real Estate Housing Developers Association,” Nordin said at a press conference after making known the first half year property market report 2018 on Thursday.
This is in view of persistent affordability issues and rising overhang which stands at 29,227 units worth RM17.24bil as at June 33, 2018, its director general Nordin Daharom said.
“It can also include the Real Estate Housing Developers Association,” Nordin said at a press conference after making known the first half year property market report 2018 on Thursday.
Nordin said the objective is not to control house prices but to monitor the different costs that go into the final prices borne by buyers.
“The department will then be able to determine the minimum and maximum price for a type of housing. The aim is to ensure that house prices remain manageable and affordable for different segments of the population,” Daharom said.
He said the proposal came about because there was not much positive response on the different cost components and developers' profit margins.
He said Melaka has such a committee to establish fair prices and it is proposed that this be adopted at federal level.
https://www.thestar.com.my/business/business-news/2018/10/11/govt-proposes-panel-to-monitor-cost-components-of-houses/
More articles on save malaysia!
RM127bil foreign investment in digital-related projects approved from 2021 to March this year
Created by savemalaysia | Jul 18, 2024
Malay contractors urge review of work rates amid rising construction costs
Created by savemalaysia | Jul 18, 2024
Johor MB announces one-stop talent hub to boost state's 2030 development goals
Created by savemalaysia | Jul 18, 2024
Putrajaya eyeing new cyberbullying law after death of influencer Esha by suicide, says Fahmi
Created by savemalaysia | Jul 18, 2024
No orders for media agencies to close their comment section, says Fahmi
Created by savemalaysia | Jul 18, 2024
Why ape your former opressors, ex-PKR MP slams move to suspend Wan Fayhsal
Created by savemalaysia | Jul 18, 2024
Discussions
Be the first to like this. Showing 1 of 1 comments
Post a Comment
Featured Posts
Latest Videos
.png)
Apps
Top Articles
1
The Alpha Trader
3
CEO Morning Brief
PGF Capital to Distribute Thermal Insulated Panels for Data Centres
4
南洋行家论股
5
Bimb Research Highlights
8
BFM Podcast
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
MQ Trading Signals
Stock
Time
Signal
Duration
Stock
Time
Signal
Duration
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
ks55
Can someone enlighten us how does a housing developer determine selling price of :
1. Condo
2. Terrace house
3. Low cost flat/ PR1MA
I am no expert in housing, but try to figure out composition of each component:
1. Terrace house (say 100k)
1.1 Cost of house sold (60k)
1.2 Contribution to School reserve, Field and playgroud, Police Station, Bomba, Road reserve etc (6k) -- Assuming conversion rate 65%
1.3 Contribution to Bumi Quota with 7% discount, Low cost housing and PR1MA (6k)
1.4 Road, drainage, street light and other infra (3k)
1.5 Sales and marketing (3k)
Gross Profit is 100k - 60k -6k -6k -3k -3k = 22k
So, if you sell a million dollar house, gross profit is 220k
Of course, you will have to give more discount under present weak market sentiment.
Some developers give up to 15% or more (Understood MK Land gives up to 20% discount).
Then you will just have 7% gross profit.
What about interest expenses during construction period?
What about interest expenses after houses already completed but not yet sold?
What about HQ expenses?
Surely looking at the numbers, most developers will be losing money, unless the land cost is low.
How to make sure houses selling cheap, and developers still make decent profit?
Only way is to removed items stated in para 1.3, that will save up to 6%.
For Condo and high-rise apartment, land cost component normally take up around 15%.
Only problem is the developers tend to overpay for the land.
So they will have to build 30 or 40 storey high-rise.
That will take them 4 years to build before they can deliver VP to buyers.
In between, if sales not good, they will receive less progress payment, and paying 4 years bank interest is enough to kill fly-by-night developers like Jaks Resources.
Many such developers will prefer to abandon the project like Plaza Rakyat, for they could not afford to pay LAD.
As how to reduce selling price for the high-rise, better leave it to the authority to work it out.
If the authority concerned is so dumb, learn the trick from S'pore HDB......
2018-10-11 22:34