Petaling Jaya: Government agencies such as Selangor State Development Corporation (PKNS) should focus on building low-cost or affordable houses, said Real Estate and Housing Developers’ Association (Rehda) Malaysia GST task force chairman Datuk Ng Seing Liong.
He commented that agencies such as PKNS were set up to build affordable houses in the early days, but has now directly competed against private developers in offering markets of higher range products.
“Now they are building projects more expensive than developers, some with houses priced at RM2mil to RM3mil,” he added in the Budget Commentary 2017 held by Rehda Institute.
Responding to the question by Rehda Malaysia deputy director Datuk Soam Heng Choon, Ng noted that cash flow shortage was the main reason for abandoned projects.
“The business fails not because of profit or losses, it is caused by the lack of cash flow,” said Ng.
He said the developers need to have enough internal fund in an event that they cannot sell their developments.
“When you cannot sell, you need to use your own fund or borrow. Abandoned projects are mostly caused by the fact that some developers did not manage cash flow properly,” said Ng.
In the panel discussion titled “Construction and Real Estate Development Aspects of Budget 2017” moderated by Soam, other participants included RAM Rating Services’s head of agribusiness, real estate & construction ratings Thong Mun Wai and Master Builders Association Malaysia (MBAM) former president Datuk Matthew Tee.
News Source:(Lee Yan Li)