Wednesday, 8 October 2014


I have never paid much attention to any of the 1M schemes that the present administration is so fond of introducing that the most recent complaint from HBA surprised me and made a strong enough impression to have a look at the PR1MA scheme.

As far as I can see, PR1MA aims to make home ownership affordable.

I can't say the few projects it has embarked upon is any indication of how successful they are, but building houses by the thousands isn't exactly something you can achieve within a couple of months considering the more than 800,000 applicants for the few projects that has been initiated.

However, I wouldn't go as far as to dismiss them out right.

So I find it strange that Chang Kim Loong of the National House Buyers Association, that organisation which is supposed to look out for the interests of house buyers, went all out and said that PR1MA's working relationship with private developers will raise house prices.

What caught my attention was the headlines -
PR1MA Corp's move will raise house prices: HBA

Now that seems to indicate fact as opposed to speculation, but upon reading the first paragraph, I realised that Chang was criticising PR1MA's decision to work with private developers which he claimed will only see PR1MA houses being priced only slightly lower than market prices.

Sun Daily ... tsk, tsk, tsk ...

The fact that he is using an NGO that was supposedly protecting the interest of house buyers to whitewash what is obviously a politically motivated piece really gets on my nerve, so I just have to give my opinion here.

The first reason he cited was "developers will add their profits to the price tags, which could push prices of PR1MA houses to almost the same level as market prices".

The key word is "could" that means it isn't a fact, and even if it is true, the price would still be below what he termed as "market price".

PR1MA is supposed to build affordable houses, not sub-standard housing for the less moneyed.  So why does he expect these affordable homes to cost a lot less than his definition of "market price"?

One of the cost in building urban housing is attributed to the cost of land, so by providing the land, PR1MA has solved that particular problem.

As for his assertion that prices are unlikely to remain low due to 'various "excuses" such as higher cost of materials and shortage of workers', I reckon it is true that materials can become unreasonably costly to smaller developers.

However, PR1MA can easily control that at the source by setting up their own materials supply chain to service their JV companies.  With the numbers they are building, they definitely have economies of scale.

All the marketing and selling will be done by PR1MA anyway, that will eliminate cost of sales for the developers, while they can claim the warranty cost against PR1MA, as and when incurred as opposed to costed in the price, hence removing the cost of warranty from the selling price.

As for labor force, I don't see how different would it be for PR1MA to manage these developers from how a large developer would manage their various housing projects under their various companies.

There is no such thing as pulling wool over the eyes of anyone because the buyer can always refuse to buy the property if he/she thinks it isn't up to his expectations and he/she can opt for the non-PR1MA housing offered by developers at only "slightly higher" than the fixed PR1MA prices.

Who these developers are and how they are chosen is immaterial as long as it does not affect the "fixed" pricing of PR1MA houses.

As to why a JV as opposed to contract out, well now, why, for example, Talam Corporation build Taman Saujana Puchong using Expand Factor Sdn Bhd as the developer instead of owning the project and contracting it out to Expand Factor Sdn Bhd?

Besides, why compare PR1MA with privatisation of government amenities?  Housing is not amenities.

Never was it stated that PR1MA will be just building "government housing" or "state housing" or "council housing", although I expect the Rent-to-Own housing would be more of this nature.

As for PR1MA for second time house buyers, why not?  As a matter of policy, moms should be entitled to house-ownership too, in case anything happens to the family unit.

Presumably the number of PR1MA houses would increase as more projects are secured and more land is made available for housing - so all that about insufficient numbers to meet demand of first time buyers and all should not be a consideration when setting policies.

His obvious insinuation of political discrimination against opposition-controlled states and victimisation of people in those states, seriously, I don't see why PR1MA housing cannot be built in opposition-controlled states if the state administrations are willing to set aside land for PR1MA housing and provide their full co-operation instead of taking pot shots at federal agencies like they are wont to do.  Afterall, state governments control all land matters.

I doubt that putting PR1MA under the purview of the Ministry of Housing and Local Government as he suggested would make any difference as that Ministry have not been able to do much all these while to control the developers from building premium-priced housing to maximised profit and neglecting affordable housing that makes it necessary for PR1MA in the first place.

My conclusion?

This dude is as fake as they come.