Gov't to build one million affordable homes via IBS, Vacancy tax not the answer to property overhang issue and more
8th August – 14th August
Works Minister Datuk Seri Alexander Nanta Linggi said the government intends to build up to one million affordable homes using Industrialised Building System (IBS) for public projects between 2018 and 2028.
Meanwhile, the National House Buyers Association (HBA) has opposed Khazanah Research Institute’s (KRI) vacancy tax proposal, saying such a tax would only negatively affect homeowners and property developers rather than address the country’s residential property overhang issue.
1. Gov’t to build one million affordable homes via IBS
The government intends to build up to one million affordable homes using Industrialised Building System (IBS) for public projects between 2018 and 2028, said Works Minister Datuk Seri Alexander Nanta Linggi.
He revealed that 1,913, or 91.5% of affordable housing projects utilising IBS were built by government-appointed developers as of 2022, reported the New Stratis Times.
Notably, the implementation of IBS in government projects grew to 84% in 2021 from 79.5% in 2020. For private projects, it grew to 60% from 41% over the same period, reported The Malaysian Reserve.
While private projects registered a significant increase in IBS implementation, Nanta Linggi said the government aims to further increase IBS adoption in private projects, targeting a 70 IBS score by 2030.
The minister underscored the technology’s potential to improve construction efficiency and reduce reliance on foreign workers, while ensuring cost-effectiveness.
He encouraged private landowners to adopt IBS system in house construction to cut labour and construction time.
2. Vacancy tax not the answer to property overhang issue
The National House Buyers Association (HBA) has opposed Khazanah Research Institute’s (KRI) vacancy tax proposal, saying such tax would only negatively affect homeowners and property developers rather than address the country’s residential property overhang issue.
HBA Secretary General Datuk Chang Kim Loong noted that Malaysia’s overhang issue is mostly caused by various factors, including economic fluctuations, market sentiment, loan accessibility, housing affordability and housing preferences, reported the New Straits Times.
He believes the problem could be addressed by a collaborative measure involving all industry stakeholders.
“If the government aims to resolve the overhang problem holistically, a detailed study of the overhang situation is necessary,” said Chang.
He pointed that implementing a vacancy tax on developers for the unoccupied and unsold units would only make new homes more expensive.
“Do not forget that property developers are profit-oriented, and whatever taxes are imposed on them are factored into the sales price. Hence, the rapid escalating house prices,” he said.
Chang said imposing vacancy tax on homeowners would be “something that is “misguided””.
This comes as homeowners are already contending with various financial costs such as quit rent, assessment rates and income taxes.
“The people will only ridicule the government for coming up with more burdensome taxes,” added Chang.
3. Sick housing projects affect 3Ps
Sick housing projects generally affect the 3Ps – pembeli (buyers), pihak berkuasa tempatan (local authorities) and pemaju (developers), said real estate analyst Professor Dr Noor Rosly Hanif.
Home buyers, particularly those purchasing for occupation and not for investment purposes, are faced with financial strain as they had to contend with rental payments and loan obligations, reported Bernama.
Meanwhile, local councils plagued with sick housing projects are forced to monitor these project sites since they often become breeding grounds for disease-causing mosquitos as well as hiding spots for the homeless and drug users.
Sick and abandoned projects also mean revenue loss for the local councils, given that they could not collect quit rent and assessment fees from the buyers.
Developers also face problems once their operational and building costs increase.
“Some of them may try to review their projects and cut their construction costs as much as they can so that their projects remain viable. The cash flow from their projects will also stop when construction work comes to a halt due to the shortage of labour and building materials,” said Noor Rosly.
He pointed that home buyers are undeniably the most impacted by sick projects as they remain tied to a house and “can’t get rid of the liability”. With this, he advised potential buyers to choose developers with a good track record.
4. Centralised Labour Quarters for migrant workers to rise in Selangor
The Selangor State Development Corporation (PKNS) has launched the RM120 million Laman Lestari project in Bandar Sultan Suleiman, Klang.
The project aims to improve the living conditions of migrant workers in Selangor by building a Centralised Labour Quarters (CLQ).
Occupying a 1.7ha site, the development will feature 336 fully furnished units, with each unit comprising three rooms, a dining area and a bathroom, reported The Star.
The development can house up to 5,712 individuals, with each unit having 17 occupants.
Set to the completed in three years, the CLQ will come with various amenities including light fixtures, electric stoves, beds, tables and chairs, fans, lockers, mattresses and pillows.
Common areas include prayer rooms, a food court and open spaces for indoor activities.
All units within the CLQ will be offered for rent at an estimated all inclusive fee of RM350 per month per person.
5. Estate workers still waiting for land promised to them 35 years ago
About 250 voters in Dengkil, Selangor are still waiting for the land promised to them by the state 35 years ago, saying they will only vote for the candidate who commits to fulfil such a promise.
The voters comprise 62 former Kampung Sri Tanjung estate workers and their families, reported The Star.
Kampung Sri Tanjung Land Action Committee representative K. Vivekanathan shared that they were among the 132 individuals that the Malaysian Association of Youth Clubs (MAYC) recruited for a cash crop project.
“Each settler was given 0.4ha land for farming purposes and were promised ownership if the land was maintained well,” he said.
The settlers developed the land even as they faced various challenges such as floods and the lack of proper access roads.
However, the Sepang Land and Mines Office seized around 40 plots of land for being left idle, although we later discovered that it was sold for another project.
In 1992, the cash crop project was eventually cancelled due to legal issues.
The settlers have been pursuing their land claim through various channels, with the latest attempt made on 4 April.
