Hopefully, new bumiputra release mechanism can reach a win-win-win decision fast. ----------------------------------- Johor to have new release mechanism for bumiputra property units PETALING JAYA (Nov 25, 2013): The Johor state government is working on a new mechanism to release unsold bumiputra properties in the state which would see property developers paying a fee and avoid extra holding costs, said property experts. Currently, property developers there have to complete 50% of the project or wait for nine months from the launch date before they can apply to release the unsold bumiputra lots for sale to non-bumiputra buyers. These units are released in batches, but no units have been released since March 2013, KGV-Lambert Smith Hampton (Johor) Sdn Bhd executive director Samuel Tan (pix) told SunBiz. Tan said under the prevailing system, property developers can only convert their unsold bumiputra units to non-bumiputra units after obtaining a letter of release from the state government. No fees are imposed for this application. Talk is rife that a new release mechanism will be implemented under which developers would pay 7.5% of the propertys selling price to a private company as a fee to immediately release all unsold bumiputra lots. We are awaiting announcement on this matter. Since there is currently no release (of bumiputra units in Johor), there will be extra holding cost (for the developers). Houses which are completed will be exposed to vandalism as these houses are not occupied, said Tan. But if the new ruling is true, developers of ongoing projects which did not factor that into their cashflow will earn less by 7.5% or the projects profit margin will become very thin. For new projects, they can factor this 7.5% in, provided the release is given within the agreed timeframe in total and not in batches, he added. While details of the new release mechanism are unclear, it is confirmed that the state government has been studying the matter, said Rahim & Co Research Sdn Bhd director Sulaiman Akhmady Mohd Saheh. He said Rahim & Co was involved in some of the earlier discussions but it is unclear how far along the talks have gone. Talks started about one to two years ago due to concerns of high supply and affordability among Johor home buyers. They were worried that there would not be enough buyers to absorb all the bumiputra units because projects there were booming (in numbers), he added. Sulaiman said however, before a new release mechanism is implemented, the authorities would have to iron out many details such as the holding period or whether there would be immediate release with the fees paid. He said one of the options for the state government is to pool the fees into a fund for building bumiputra units or affordable homes in other areas, although he acknowledged that this has its challenges as bumiputra home buyers may not like the areas where the units are built. He said doing so would also segregate the bumiputras from non-bumiputras, which could defeat the efforts by the Iskandar Regional Development Authority to assimilate the population better. -The Sun Daily 25 Nov 2013-
Posted on: Mon, 25 Nov 2013 10:45:23 +0000
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