Double-storey terrace house can cost RM1mil in 5 years time, says Sheda

Sarawak had slipped into the severely unaffordable category in Malaysia's housing affordability index – even beating metropolitan Kuala Lumpur.-

KUCHING: A double-storey terrace house in Kuching city could cost more than RM1 million in five to 10 years time, Sarawak Housing and Real Estate Developers’ Association (Sheda) president Joseph Wong said.

Wong painted such a scenario “if no changes are made to the planning requirement and also if very little affordable housing is built to cater for the middle household income group whose household income is between RM4,000 and RM8,000”.

The group makes up 40% of the people.

Speaking at the opening of Sheda’s property expo at Borneo Convention Centre in Kuching (BCCK), Wong said first, Sarawak had slipped into the severely unaffordable category in Malaysia’s housing affordability index – even beating metropolitan Kuala Lumpur.

He said secondly, the cost of doing business is also getting more expensive.

“Developers are currently facing the challenges of high labour cost, in addition to high land, construction and other compliance costs.

“The rise in labour cost will double or even triple in the next decade as the weak ringgit begins to deter foreign workers,” he said.

Wong said government policy changes, like the proposed shift of responsibility of foreign workers levy to employers and the ban on construction workers living construction sites would further exaggerate the rate of increase in labour cost and the price of houses.

The shift of responsibility of workers levy might come into effect next year.

Wong compared the middle household income group to “a middle child, who is largely ignored and left to fend for himself”.

“Yet just like the middle child, the M40 (middle 40%) group seems to have been left to their own devices when it comes to owning a home, and dealing with skyrocketing property prices.”

However, it was all not gloom and doom.

Wong said despite the ongoing hurdles, demand for affordable homes remain strong “as seen in the PropertyGuru’s Affordability Sentiment Index 2016 where 40% of respondents are looking at buying affordable homes priced between RM250,000 and RM350,000”.

In order to overcome this predicament, Wong called for more housing initiatives from the government.

On the other hand, developers too needed to be encouraged, he added.
“Sheda has proposed to the state government on a number of measures to stabilize the housing prices in Sarawak.

“We are patiently waiting for a favourable from the ministry of resource planning and environment.”

Wong said if Sheda is given the same treatment the government accords to PR1MA housing developers, as promised by Chief Minister Datuk Amar Abang Johari Tun Openg during their courtesy visit to him in February, the association would then commit to building 20,000 affordable houses with selling prices between RM250,000 and RM350,000 in the next five years.

“This is equivalent to more than RM6 billion in gross development value (GDV) in the Sarawak property sector which will not only benefit the middle income families but also contribute sustainability to the Sarawak economy,” Wong said. –