Effective 1 Sept 2016,
Selangor Government and LPHS have imposed new Guidelines for Commercial Residential Development

Any development with commercial title and means for residential purposes such like Service Apartment, SOHO , SOVO , SOFO and Office Boutique, will require to comply with some of the guide below

1. If LESS than 500units, compulsory to built 10% of Rumah Mampu Milk
2. If more than 500 and less than 1000units, compulsory to built 15% Rumah Mampu Milk
3. If more than 1000units, compulsory to built 20% Rumah Mampu Milk
4. If located within TOD Zone , compulsory to built 30% Rumah Mampu Milk

Exp,

300units normal service Apartment, will need to built another 15units (5%) service Apartment Mampu Milk

1200units SOHO, will need to built another 240units (20%) SOHO Mampu Milk

Fixed price and minimum sizes

1) Service Apartment and SOHO fixed price at RM270K with minimum size from 550sqft.
2) Boutique Office , SOVO, SOFO fixed price at RM 230K with minimum size from 450sqft.

This requirement will take effect for all submission after 1 Sept 2016.

Earlier submission (before 1 Sept 2016) and those KIV submission after 31 Dec 2015 will not be affected.

Do you all think that this new Guidelines will effectively control the oversupply of Commercial type of residential development (Service Apartment, SOHO, SOVO, SOFO) in Selangor????

This post has been edited by DS4: Sep 24 2016, 10:38 PM

Before this many developer's chose to convert residential land title to commercial type in SSelangor state, for the following reason

1) To built Service Apartment (commercial title) rather than condominium or Apartment (residential title) due to compulsory allocation for Rumah SelangorKU if you built residential title house.

2) Working on plot ratio (commercial title) rather than Density (residential title), due to plot ratio doesn't limit the numbers if units but density is counted by numbers if units. 550sqft Service Apartment can easily sell with higher psf than condominium with 850sqft.

The fixed price is for those mampu milik units only?

Yes. Only applicable for all different types of Rumah Mampu Milk

also higher margin of financing LTV80 compared to LTV70.
less furnishing required...can give bare units bare floors...cheaper to build yet can charge sky high price.
and no need to provide compulsory carparks if resi.

This post has been edited by BEANCOUNTER: Sep 24 2016, 12:50 PM

Yes, that's why many developer's opt to built commercial type of residential development instead of residential development.
Internal unit doesn't need to provide any internal wall, tiles and really save a lot..

This is good move to protect Service Apartment , SOHO, SOVO, SOFO market.
Especially for those who already purchased and worried on excessive supply.

Expected developer will allocated those Mampu Milik unit at lower floor, facing no view, or thise same floor with utilities room or below water tank units.

From approval to vp could take up to 5 years. This guidelines is likely to curb oversupply for next few years.

The higher and stringent the requirements,

The higher the selling price will be set.

Due to the fact anticipated developer's profit is fix at 20% minimum.

Land cost and construction cost (material and labour wages) will increase over time.

Even if those soft cost not much changes, the property price for new launching will still increasing.....

The rule is out of good heart, but only works for developer with a big piece of land or several parcels close to each other. t For those had to squeezed in the requirement unit into the same building, he ultimate bitter is swallowed by the consumer.

High count residence already lead to high probability of rat among the good. Now you mix lower income people in regardless the market segment of the product.

Imagine you work your ass off to live in a quality environment, only to know that you have a few slums at lower floor or facing the cemetery or whichever less appetite direction... This really getting like those sci fi movie...

is the state govt allowed poorer residents now to occupy sovo and sofo as residential units with these laws?

Historically, property price rise at about inflation rate in the long term.

Drastic kv property price rise from 2011 to 2014 was a fallout of US QE. As income didn't rise inline or faster than property price, current property price is unsustainable.

Believe the intention of this guideline is to discourage developer to build unregulated commercial titled residence.


This post has been edited by icemanfx: Sep 24 2016, 03:32 PM

Agreed, those developers with only have one block to launch,

Will really need a very good strategy on how to allocated affordable SA, SOHOetc... Within same building.

In Penang, in fact, already have this practice with different entrance and different lift to serve.

But this will reduce building efficiency and eventually with lower NFA...

On facilities wise, really difficult to separate, due to the fact those affordable house buyer are still human

I can't really comments those group are poorer as you mentioned.

But the maximum monthly wages for household income shall not be exceeding RM10,000/-

But for subsale, you can only sell these affordable units for those who must owned company,

say enterprise and is one of the director.....

Yes, you hit the point.

The Goverment aware that more and more these type of so called Service Apartments, SOHO, SOVO, SOFO, Office Boutique are used as family residential,
So they really discourage developers to use this loop hole to sell as a "residential Unit"

The first move is to limit the type of business in these kind of building.
Such like small bakery shop, salon, massage, music centre, kindergarden, dancing centre, singing centre, store...
Are all NOT ALLOW to be operated in SOHO, SOVO, SOFO....OFFICE BOUTIQUE...

Sorry I a bit confuse on this.

1. If more than 500units, compulsory to built 5% of Rumah Mampu Milk
2. If more than 500 and less than 1000units, compulsory to built 10% Rumah Mampu Milk

If 505 units which one is required? 5% or 10%? 🤔

Simple logic

TS, can u share the source of this guideline?

Mean? Logic wise is 5% since 505 is close to 500? What if 750 units?

Bro, typo error, item 1, if LESS THAN, Then only 5%

Thanks for correction

No problem, but wait for Monday,

Lazy to open my pic.

Btw, the source is from LDPH.

I am one of the REHDA members and within this circulation.

Already confirmed, is official letter

505 is 10%

Between 500 to 1000units.

How come the allocation % is different from what they announced?

http://www.thesundaily.my/news/1960084

10% for 500 units and below
15% for 501 to 1,000 units
20% for more than 1,000 units
20% to 30% for TOD

Removed

This post has been edited by brianklc: Sep 24 2016, 09:49 PM

should hv an expiry date for those approved submissions else those holding the previous guideline approved plans or KIV then apporve later ones can hold forever with the old guideline

Amended. Thank you

Usually the approved km is valid for 90days.
Still subject to application extension.

“We don’t care how big or small they are (non-affordable units), but the size of affordable ones must be 450 and 550 square feet,” Norzaton told SunBiz in an interview last Friday."

This hints that developer has the freedom to build a smaller size than minimum spelt for non-affordable units for some reason(cost saving, competitive pricing etc). Potential draeback of non-affordable units...

Also, this guideline does not seem to stop people from staying at sovo, sofo or the like ...

Ultimate aim for this guideline is to control the current oversupply of SA, SOHO, SOVO....
Also, discourage developers to built commercial type of residential development.

Before this, it is unfair for those developers who need to built Rumah SelangorKU
If they building residential title development.

Understand the ultimate aim to control and the background of this guideline...however, developers, after cost feasibility study, can still choose to build sovo and/or sofo. Maybe less but still growing.

Then, in overall, the grey area of staying at sovo and sofo is still there....

I think this new guideline is not discourage people staying at SOVO or SOFO,

Instead, they try their best to make the above two more "home like",

One of the key example is they are limiting many types of business to be operate in SOFO and SOVO.

Especially those generated Sound, smell, are all ban to be operated.

In their guideline, they encourage those young professional, IT and computer operation industry, and online type of business, to be operate at this type of property.

Anyhow, REHDA Selangor is currently prepare some write up and comments and hopefully there will be win win situation for occupier, invested, developers as well as Selangor Goverment...