The most talked about property news this month that has got young people very excited is the Government’s initiative for affordable housing in Greater Kuala Lumpur where Malaysia’s largest population resides.
This arises out of recent concerns that young people entering the property market are unable to purchase affordable homes and to purchase a home within their budget they have to go further and further away from the city centre, thereby incurring additional costs of transport and infrastructure facilities.
It is a fact that almost all capital cities are expensive and if we look at our sales statistics for the Greater Klang Valley for the first quarter of 2010 with the first quarter of 2011, we can see that overall in Kuala Lumpur property prices went up by an average of 10 – 12%, which even in this current world’s shaky economy is a fairly substantial increment. In some branded districts it has exceeded this figure.
Not allowing Malaysians to own affordable homes is not sustainable economically or politically as other socio economic forces come into play. It was Lee Kuan Yew who said “People who have a stake in the ownership of a country are evolutionary and not revolutionary”.
The issue is we have had attempts at affordable homes or low-cost homes before, but the process of identifying suitable land for low-cost housing and to also force private sector developers to build low-cost housing as a cross subsidy of their own housing programmes on a greenfield site has been poor.
While developers have built their houses for the market and successfully sold them many have quietly abandoned the idea of building low-cost housing. Providing the necessary infrastructure for such a development as a subsidy between the cost of the project and the returns of investment is quite large and if it can be avoided it usually is.
to be continue in Part 2
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