KUCHING: Although the housing market is gradually picking up with the Home Ownership Campaign (HOC) as initiated by the federal government, strict loan requirements are still making the sales of houses challenging for developers, said Sarawak Housing and Real Estate Developers’ Association (Sheda) vice president and Kuching branch chairman Sim Kiang Chiok.
“Developers love to build, but it takes three major players to make a successful development — the developer, the purchaser and the banker,” he told New Sarawak Tribune yesterday.
“The bankers’ lending guidelines by Bank Negara are overly cautious and too strict for developers to build more without overhang in properties,” he said.
Sim also remarked that there could be a mismatch of supply to demand in the housing market. Developers could be building too many high-end houses that might not have that much demand.
“There may be a short supply of lower-end houses as there might not be enough margins for these to be attractive enough for developers to build, as the cost of development is always rising,” he explained with regards to the housing bubble, adding that unfavourable locations or unsuitable designs were other factors to consider.
He revealed that the most sellable housing units are still double-storey terrace houses which range from RM400,000 to RM450,000, aside from affordable housing subsidised by the state government which cost RM110,000 to RM200,000.
Referring to the state government’s agenda to strategise and plan new housing estates to cope with Sarawak’s population increase over the next 30 years as highlighted by Chief Minister Datuk Patinggi Abang Johari Tun Openg, Sim shared his view that the state government’s planning on future housing is usually based on population census, and a shift in trend is to be expected.
“Currently, our population distribution is about 50 per cent in urban regions and 50 per cent in rural areas.
“In most developed nations, population distribution is about 70 per cent in the urban and 30 per cent in the rural,” Sim said.
Thus, he stated that the state government is planning on such a shift in population distribution in order to cultivate a developed nation whereby more employees are needed in urban areas.
“To manage or reduce the rural-urban migration would require the creation of more infrastructures so that rural workers can be employed in cities and towns but still be able to return to their homes in the rural areas,” he said.
Sim felt that the other option would be to generate more job opportunities in the rural regions, which is usually unsuccessful due to poor economies of scale.
“With an expected 20 per cent of the present population of Sarawak of 2.5 million — that is, about 500,000 people — shifting to the urban areas, with say about 4.5 people per household, that amounts to an estimated 111,000 housing units required.
“So, it is expected that by 2030 or in about ten years’ time, 11,100 houses will be needed annually,” he said.
According to Sim, the government has also taken into account the estimated two per cent population growth per year, which will also drive up the demand for houses.
By his calculations, that would come to approximately 11,000 additional houses required per year.
“So, the total estimated housing demand is about 22,100 units per year,” he remarked.
However, Sim revealed that less than 10,000 houses are built annually.
Touching on the optimal solution for this rising demand, he stated that the best option would be affordable houses free of conditions, where the purchaser can trade up as they improve in their social-economic standing.
