With so much spotlight on the affordability of residential units, a certain news took me aback.

Rehda revealed that the housing industry are “.. required to pay the 7% bumiputera discount as a levy to the state.”
Source : http://www.theedgemalaysia.com/in-the-fina...e-20-in-2h.html

It is general knowledge that 30% - 70% of residences are held back to fulfil the bumi quota policy.

Lets say a condo project is 500 units @ rm500,000, taking an average of 50% units held as quota, it works out to be 250units x rm500k = rm125,000,000 worth of condos kept in the store. To any business, this is an interest element on money. Lets say 6% interest charged on project financing, 6% x rm125m = 7.5m/yr interest. If these quota are held over 3 yrs unsaleable, then rm7.5m x 3 = rm22.5m interest paid by developer to the bank.

3yrs later, when developer opens these 250 units to the public, they have to pay 7% levy, 7% x rm125,000,000 = rm8,750,000 levy to the govt.

How does the developer cover these costs ? Us of course, they raise the prices. How much do we have to pay to buy a unit of condo ?

RM22.5m + Rm8.75m = rm31,250,000 of interest & levies.

All these expenses divided by the unsold bumi lots = Rm31.25m / 250units = rm125,000

When these are opened, the condo would cost Rm500,000 + rm125,000 = rm675,000.
Yes, we have to pay extra rm125,000 to cover the govt policy that forces developers to hold empty units of condos & extra payment of levy ! This is crazy..

Rm125,000/rm500k = 25% increase in selling price.

If you are buying rm250,000 property, the developer will add in 25% ‘cost’ = rm62,500. That means selling price of rm312,500 !! Is it a wonder even apartments are so crazily priced now ?!

This is easy money to the govt, from the common people ..

I’m writing this on the fly, pls correct me if there are any miscalculations

cannot stop ppl from buying property la..lots of ppl got money..only we that complain have not so much money..

some ppl drive kancil, some ppl drive honda, some ppl drive mercedes. it's a wonder how ppl managed to stay in 2 million bungalow, drive mercedes, raise a family..and wife not working summore. but i guess they are just better at finding the $$.

i guess just buy what can afford lo.. i think some of the ppl's gaji can buy walk-up apartments, but they dowan to stay..want stay in high-end condo and landed property..so surely cannot match..

we cant change policy..but we can determine how we vote for a better future..so let's keep our fingers crossed!