Given the sharp hike in housing prices in the hot markets of the Klang Valley and Penang island in the past two years, it is about time some long-term initiatives are implemented to promote the decentralisation and widening of our “core favourite markets” to the larger undeveloped peripherals.

Besides ensuring that development will be spread out to other parts of the country, these efforts will also be able to help “cool down” the hot property market.

Unlike some countries that face acute land shortage problem, Malaysia is blessed with vast tracts of land but the main problem causing the centralisation of development in the few core corridors can be traced to poor accessibility and lack of facilities of these undeveloped locations.

Fast-track development efforts such as extending the My Rapid Transit (MRT) system and promoting other urbanisation projects and activities to the outskirts will be a good start to spread out the development efforts.

I believe once such plans are in place and made known to the public, land owners and developers with land in these parts of the country will be encouraged to open up their land for development.

Unlocking the value of these land will be a worthwhile proposition to catch the wave of the seemingly insatiable demand of the housing market now. With the higher supply of good property projects, it will help to ease the market and prevent overheating like what has happened to some countries.

Developers looking to move into “blue ocean” or underserved market should make their move to lead in the affordable housing market by offering quality projects as they can be assured of a good following.

Malaysia is still a relatively young country and has a sizeable population of under the age of 40 years. Save for the 10% to 20% of the population who are in the wealthy and super-rich categories, most of the first-time home buyers will opt for medium-priced property.

I believe the local property landscape will need to go through major changes to keep up with the rapid urbanisation and rising housing and infrastructure needs of the maturing population.

And developers need to think out of the box and introduce more innovative building and design plans in their projects.

Some of the workable ideas include adopting minimalist housing designs to keep cost down and offering more flexibility to buyers to “dress up” their own property.

Available statistics show that many of the unsold residences in the KL City Centre (KLCC) area are highly luxurious and extravagant in their built-up (some up to 20,000 sq ft), which means their prices are also way above the affordability of the average Malaysians.

As such, projects that have yet to get off the ground can still be redesigned to allow for more smaller units of about 800 sq ft to 2,000 sq ft.

The condominium sector, particularly in the KLCC area, is still reeling from low take-up and occupancy rates.

In fact, a number of high-end projects witnessed a decline in both capital values and rents as the market consolidated after the heady growth of 2007-2009.

Of concern is the impending supply, with 2011 completions projected to be around 6,000 units, and we can expect this to have a further downside impact on the luxury residential market.

It is worth noting that despite the perceived wealth created by the sharp property price hike for property owners and investors, this will remain merely as “paper” gains unless the property have been transacted for cash.

Unless one is a serious investor and has a portfolio of property assets, those who can count the property they are currently occupying as their only asset will not be better off in monetary terms, unless they are counting the gains made on paper.

For many, the house or shoplot that they are occupying is the only asset that they own. There is no way they can realise the gain that comes with the higher price unless they are willing to liquidate their position by selling their unit and become a tenant.

But as we know, prices can go upwards and likewise they can take a dip when the market turns. So like the saying goes: It is wise not to count the chicks until the eggs are hatched.

For many average Malaysians who are dependent on their monthly wages to make ends meet and have yet to purchase their own home, they are the most hard hit by the property price hike. They are the ones who have little choice but to scour around for more affordably priced property to buy.

The various Government initiatives to set aside land for affordable projects is a good first step to a plan for more affordable projects for the average Malaysians.

Sizeable land parcels that are suitable for township development has become scarce and the Government’s pledge to set aside enough land to build medium-priced housing projects will hopefully be a long-term commitment to benefit the larger populace of the average folk.

Land is one of the main ingredients that have to be in place to ensure the success of the affordable housing programmes.

Development projects need planning and a gestation period from a few months to a year or two to materialise. By the time the two affordable housing programmes – My First Home Scheme and 1Malaysia Housing Programme – are able to deliver their first completed units to buyers, it will be at least two years down the road.

In the interim period, private developers have to take on the responsibility as the provider of these housing units and those who do will benefit in the long run.

SOURCE: The Star