Overhang in PR1MA units calls for review of policy
PR1MA has given us new numbers to chew on.
As at Nov 15, 2017 a total of 12,640 units of PR1MA homes have been sold. This is more than half of the 25,132 units open for sale.
Numbers they did not provide, however, is its completed units in Kedah that have not been sold. According to the National Property Information Centre (Napic), the 4,363 units unsold in the state with the highest number of overhang units were mostly PR1MA homes.
The question is should this be happening when the homes are purportedly affordably priced and based on proper demand analyses and market studies?
And should we be proceeding with the 141,161 units in various stages of construction when there is already an overhang in the market? Should the situation not at least warrant a review of the approach of PR1MA in their development?
Of course an overhang in Kedah does not mean that the same will happen in Kuala Lumpur or Selangor. As PR1MA rightly pointed out, a total of 224 units, or 42% of the 542 units up for sale for its PR1MA @ Jalan Jubilee in Bukit Bintang were taken up in only three days.
Their statement however, while expressing the latent demand for affordable homes in strategic locations, does not reflect the likelihood of the buyers getting loans to purchase the home.
The largest unit in the Jalan Jubilee, Kuala Lumpur, development, a 1,089 square foot unit with three bedrooms and two bathrooms, for example, is going for RM445,000. This is RM45,000 more than the promise of a maximum of RM400,000 for the home.The rationale of it, one hopeful buyer said, is that the extra RM45,000 is for an additional car park. It could not be ascertained if opting out of one car park is possible.
How far should PR1MA be allowed to deviate from its mandate?
A programme which was initially to ensure that the average Malaysian can own its first home, in 2013, allowed purchase by second-home buyers and even increased the eligibility criteria to include households with an income of RM15,000.
Should government resources not be spent in a targeted manner for those who need it the most?
Budget 2018’s announcement of a RM1.5 billion allocation for PR1MA to build homes that are worth RM250,000 and below also raises more questions really. Will the allocation be for land or a form of subsidy to keep prices low?
The numbers spell out the problem. The policy should dictate the solution.
Source: The Sun Daily