By Khairie Hisyam
The establishment of a Bumiputera Development Unit (BDU) in the Ministry of Urban Wellbeing, Housing and Local Government to monitor issues related to bumiputera housing quota has drawn flak from the National House Buyers Association (HBA).
Abdul Rahman Dahlan
Yesterday, the Minister of Urban Wellbeing, Housing and Local Government Abdul Rahman Dahlan said that the BDU will discourage housing developers from opting out of building affordable homes for the community.
“There had been occasions where housing developers asked that they be allowed to sell off unsold bumiputera-reserved units as ordinary units,” said Abdul Rahman.
“BDU will monitor and discourage such action; we will scrutinise whether they had advertised about the houses and if they did, whether the adverts were placed in a little corner that was hardly noticeable,” added the housing minister.
When contacted by KiniBiz, the HBA feels that it is an “irrational” move by the government to profile races and disagrees with the government’s initiative to profile races when it comes to housing matters.
“Anyone who deserves a house under the affordable houses category should get a house irrespective of race,” said HBA honorary secretary-general Chang Kim Loong, who declined to elaborate further.
Real estate researcher Professor Ting Kien Hwa, however, points out that the agenda has already been done before under various agencies such as the Selangor State Development Corporation (PKNS) and Urban Development Authority (UDA).
“I am wondering how, this time around, we can achieve this objective,” said Ting, who heads the Centre for Real Estate Research (CORE) at Universiti Teknologi Mara (UiTM).
Ting further points out that based on past experience, the problem has been that many Bumiputera house buyers are reluctant to purchase Bumiputera-allocated units in housing developments despite the discounted price.
“They find themselves restricted when they want to sell the property as they can only sell to another Bumiputera,” said Ting to KiniBiz, explaining that this leads to many Bumiputera buyers preferring open market titles.
This preference is further augmented by the market wisdom that open market titles usually command higher prices than Bumiputera-restricted titles, often by more than the Bumiputera discount amount.
This is the underlying problem that needs to be addressed, said Ahyat Ishak, founder of the Pejuang Hartanah program which aims to promote property ownership and investment among Malays.
While Ahyat feels the housing minister is the right person to address the issues and challenges in the housing industry including excessive speculation, he expressed concern that this initiative may not necessarily solve the problem of Bumiputera ownership of property.
“Personally, I feel that there is a deeper problem to solve based on my observation,” said Ahyat to KiniBiz. “You have got to create the desire in Malays themselves to want to buy property — the Chinese (for example) are already invested in the property market and the next frontier (of market growth) will be when Malay involvement in the property market reaches critical mass.”
“You can lead a camel to water, but you can’t make it drink,” added Ahyat, explaining that the avoidance of Bumiputera-allocated units is perhaps due to the lesser participation of the Bumiputera themselves in the property market. “I always say in my talks that one shouldn’t call oneself a Malay in Tanah Melayu if one does not own property.”
At press time, the Real Estate and Housing Developers’ Association (Rehda) has not responded to emailed queries from KiniBiz.
However, according to the findings of Rehda’s 1H2013 Property Industry Survey, 55% of the survey’s 150 respondents indicated that they have unsold units with 16% saying that these unsold units are severely impacting their company’s cash flow.
In addition, most of these respondents cited unreleased Bumiputera lots as the main reason for these unsold units.
“There is no timeframe for the release of these Bumiputera quotas, so the developers are hard-pressed,” said Anthony Cho, chairman of the Malacca branch of Rehda, earlier this month when speaking at the media briefing of the 1H2013 Property Industry Survey’s findings.
“That is why I (have) advocated very strongly to the state government that by having a rigid Bumiputera quota, you are forcing the developers to move away from the affordable housing (segment),” said Cho. “Because of the Bumiputera quota, if they cannot sell then they’ll go to the higher end market to make better profits.”
It is worth noting that the BDU in the housing ministry would fall under the federal government whereas land and property matters are for the most part under the state governments’ control.
Therefore the BDU would “still need to work with the state governments”, said property lawyer and author Khairul Anuar Shaharudin.
“The BDU does have legal power because as part of the ministry, they are responsible in implementing federal government policies,” commented Khairul Anuar further when asked whether the unit would have the necessary legal framework to empower it.
Ahmad Maslan
Abdul Rahman’s announcement came as Deputy Finance Minister Ahmad Maslan stressed the urgent need to establish such units in every ministry to support Bumiputera economic development.
“We (the Bumiputera) are the majority and if the government assists the majority, others will also benefit,” Ahmad Maslan was quoted as saying. “We need to be proactive in forming the (BDUs) as Bumiputeras had been left behind for the past 50 years.”
Ahmad Maslan was further quoted as saying that the BDU’s organisational structure will be detailed by the Economic Planning Unit (EPU) and the Bumiputera Agenda Steering Unit (Teraju) while the upcoming Budget 2014 will take into account allocation for BDU.
The establishment of these units is part of the recently announced Bumiputera economic empowerment initiative unveiled by prime minister Najib Abdul Razak on Sept 14, 2013, which economists had criticised as lacking foresight and not addressing fundamental issues at the core of the problem.
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