PETALING JAYA: A feasibility study should be done before planning for any property development, said Rahim & Co International executive chairman Tan Sri Datuk Abdul Rahim Abdul Rahman.
“A property development is different from other types of development as it usually takes about four to five years to be developed. By the time they buy the land and earn the approval, the circumstances have changed.
“The economic condition and supply-demand relation would be different from when they started planning. It is why there needs to be a feasibility study, not just for the existing situation but also for the future,” said Abdul Rahim during the recent press conference of Rahim & Co International Property Market Review 2017/2018.
He also added that the government should provide more affordable homes at the right location and target the right demographic, in light of the public demand for affordable homes.
Reducing construction costs and increasing the household income of the public were also suggested by Rahim & Co International Petaling Jaya office director Sr. Choy Yue Kwong as ways to reduce the housing prices and meet the demand.
“I think both sides of the equation need to take action. The government needs to increase the income level of the country, but also, on the other side, the developers need to reduce the cost of development.
“There are various measures to reduce the cost of the developments. One way is for government to release more lands, secondly they can also reduce the amount of bureaucracy that developers need to go through in order to get the approval and thirdly, the compliance costs could also be relooked at, as nowadays it is very hefty and it has contributed to the hike of the house prices as well,” he elaborated.
During the presentation of the property market review, Rahim & Co International director of research Sulaiman Saheh pointed out that according to their research, an average terraced house would cost Malaysians 5.3 years of their household income.
“The housing affordability definition that we used is based on average house prices versus the median income. We found out that an accumulated 5.3 years of household income is required to purchase a typical terraced house in the country,” he said.
Suleiman also mentioned that the 2018 property market outlook would be segmentized across different sectors. The affordable market segment is expected to perform better compared to the other sections.