Sarawak Developers No Longer Required To Build Affordable Homes, Penang Land, Plot Owners To Enjoy 50% Discount On Overdue Fines And, More
3rd January – 8th January
The Sarawak government has eliminated the requirement for 30% allocation for affordable homes in housing development projects exceeding 10 hectares.
Meanwhile, the state government of Penang has introduced a 50% discount on overdue fines for land and plot owners who make a lump sum payment to settle their fines.
1. Sarawak developers no longer required to build affordable homes
The Sarawak government has eliminated the requirement for 30% allocation for affordable homes in housing development projects exceeding 10 hectares.
Instead, developers would be required to make compensation, the amount of which will depend on the location and the land’s market value, reported Malay Mail.
“We are in the process of discussing the formula on the quantum of payment,” said Premier Tan Sri Abang Johari Openg, noting that the new policy is set to be implemented in the first quarter of 2024.
He added that the percentage payment will be required upon project approval, with developers provided the option to settle the full amount.
A trust fund will be set up from the money collected from developers, allowing the state to use such fund to develop affordable housing projects.
Notably, 30% of the land set aside for affordable homes will be developed by the Housing and Development Corp (HDC), he said, underscoring trust issues with some developers who failed to meet affordable housing commitments.
He cited the example of a housing developer in Samariang, Petrajaya, who initially built good quality homes but delivered low quality ones during the project’s later stage.
2. Penang land, plot owners to enjoy 50% discount on overdue fines
The state government of Penang has introduced a 50% discount on overdue fines for land and plot owners who make a lump sum payment to settle their fines.
Approved during a meeting in December 2023, the discount will be offered until 31 May, said Penang Chief Minister Chow Kon Yeow.
He noted that the initiative is aimed at encouraging land and plot owners to pay their taxes on time, reported Free Malaysia Today.
He added that the discount is automatically applied to overdue fine payments by taxpayers at the land and district office counter or via the PgLAND online portal.
Chow pointed that the discount applies to those who received Penalty Notice 6A (land tax) or Penalty Notice 11 (plot tax).
He explained that the reduction is not retroactive, hence, does not apply to instalment payments or to overdue fines paid prior to 2 January – which is the discount’s effective date.
“Any landowner with further inquiries on related matters is encouraged to contact the revenue unit, Penang land and mines office, or the land and district office,” said Chow.
3. Penang sees surge in affordable housing supply
Penang saw the supply of affordable homes (RMM) increase by 70.31% to 154,685 units from 2008 to 31 December last year.
Of these, 50,700 RMM units have been completed, 20,249 units are under construction, and 83,736 units are under planning or approval stage, reported Malay Mail.
Noting the strong demand for affordable home, Datuk Seri S. Sundarajoo, Chairman of the State Housing and Environment Committee, urged developers to actively contribute to the affordable housing segment. He revealed that the state has extended the Home Ownership Campaign 3.0 Plus (HOC 3.0 Plus) from 1 January to 31 December.
“The policy which was implemented since 2020 is aimed at stimulating the property sector and at the same time assist the people to own houses in Penang,” he said.
He shared that the HOC 3.0 Plus has four main initiatives aimed at the public. These include a 10% reduction in RMM C’s ceiling price and selling unsold completed units or “overhang”.
4. RM2.66 billion worth of ECRL projects awarded to Bumiputera companies
The East Coast Rail Link (ECRL) has clarified that RM13.64 billion in contract value has been awarded to local companies as of 30 November 2023, surpassing the RM10.8 billion target, reported Malay Mail.
Of this amount, RM2.66 billion, or 76.07% of the RM3.50 billion target, was awarded to Bumiputera contractors, suppliers and consultants, said ECRL project owner Malaysia Rail Link Sdn Bhd (MRL).
The statement was released following Persatuan Kontraktor Melayu Malaysia’s (PKMM) claim that the contract value figures for ECRL’s civil works awarded to Bumiputera companies were doubtful.
From 2017 to present, MRL and China Communications Construction Company Ltd (CCCC) have cooperated with the respective state governments to further improve the involvement of Bumiputera contractors in the project, read the statement.
“We would like to emphasise that efforts to empower Bumiputera involvement in the ECRL project is always a priority, even though this is not stated in the engineering, procurement, construction and commissioning (EPCC) contract agreement, which only requires the involvement of local companies,” it added.
5. Neutral outlook for property sector
Hong Leong Investment Bank Bhd research (HLIB Research) expects the property sector to normalise this year, following an outstanding performance in 2023.
Notably, the Kuala Lumpur Property Index posted a +34.5% return in 2023, reported the New Straits Times.
The research house noted that all property stocks under its coverage had positive returns last year, with Sunway Property Bhd, Matrix Concepts Holdings Bhd and OSK Holdings Bhd hitting their all-time high stock price.
However, it expects the pace of billings for this year to normalise with new launches and sales posting moderate growth.
It attributed the accelerated billings in 2023 to developers’ effort to avoid paying Liquidated Ascertained Damages (LAD).
“Secondly, the higher sales in 2023, in our view, was partly due to some buyers shifting from secondary to primary market as more new products were available in the latter,” said HLIB Research.
Developers ramped-up launches in 2023, meant that the market will take some time to absorb the supply.
As such, developers are not expected to significantly increase their launches for this year.
With this, HLIB Research kept a “Neutral” stance on the sector, a downgrade from “Overweight” in December 2023.
6. Kenanga Research sees improved margin for construction industry in 2024
Kenanga Research believes the profit margins of the construction industry will improve in 2024 due to the phase-out of older contracts with lower margins and the entry of new contracts with more normalised margins.
It noted that the new contracts have factored in cost inflation and comes with price-escalation clauses, safeguarding contractors’ profit margins post-pandemic, reported Bernama.
Retaining an “Overweight” call for the sector, Kenanga Research expects a surge in public infrastructure projects this year despite a lower gross development expenditure in Budget 2024 only stands at RM90 million.
Projects on the priority list include the Mass Rail Transit Line 3 (MRT3) or MRT Circle Line aimed at enhancing connectivity and the Bayan Lepas LRT to ease traffic congestion in Penang.
“We believe, realistically speaking, MRT3 is more likely to get off the ground in the second half of 2024,” said Kenanga Research.
On private sector construction, the research house expects the sector to remain vibrant, on the back of significant investments in data centres and semiconductor foundries.
The rise of Malaysia as a data centre investment hub is evidenced by Tenaga Nasional Bhd’s supply agreements with eight data centres.
7. Sungai Bunus flood retention pond to be de-gazetted?
The Federal Territory of Kuala Lumpur Land Executive Committee (JKTWPKL) is poised to reverse its decision to gazette the land surrounding Sungai Bunus flood retention pond as an impounding reservoir.
The authorities’ decision back then was aimed at combatting the persistent flooding within the city, reported The Star.
On 27 December 2023, however, JKTWPKL issued a Notice of Proposed Revocation of Reservation Land for Public Use, causing an uproar among residents within the vicinity of Sungai Bunus and stakeholders.
“I was utterly dumbfounded upon learning about this,” shared Datuk M. Ali, Coalition Chairman of Save Kuala Lumpur (SKL). He described the proposed revocation as nonsensical and a regressive step.
He added that while they recognise the government’s power to rescind previously gazetted lands, such move should be backed by compelling justification.
Meanwhile, PTGWP (land registration sector) Deputy Director Mohd Firdaus Ibaruslan explained that the revocation was meant to amend the land status from “Flood Retention Pond” only to “Flood Retention Pond and Open Area”.
The revision aims to standardise the classification of land under Kuala Lumpur City Hall’s (DBKL) jurisdiction and not to prepare the land for development or sale.
