Releasing Unsold Bumi Units Helps To Reduce Price Pressure

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Releasing Unsold Bumi Units Helps To Reduce Price Pressure

Postby victor » Mon Jun 25, 2012 12:58 pm

Unsold bumi units should be released to the market to increase supply to reduce price pressure which is good for everyone.....This also helps to avoid misallocation of resources for the country....This measure also helps developers as they do not need to waste resources keeping all unsold units, reduce borrowing with less unsold units, etc etc.... this is a long overdue measure...Any other :D opinions?


(Based on the recent survey carried out by property guru....)
66% respondents agree that developers should release intended bumiputeras units/lots sooner to other buyers should there be insufficient response after extensive advertising and promotion. 62% first time buyers agree on this, whereas only 37% of bumiputeras agree to this.
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Re: Releasing Unsold Bumi Units Helps To Reduce Price Pressu

Postby darthvest » Tue Jun 26, 2012 5:11 pm

A more standardized guideline in handling the bumi units will provide better transparency.
I always think that the allocation is 30%, but seems like there are many variance. Depending not only on property class,also on developer. Now even on state eg Kedah going for 50/70%?
Lately many developers are using this "bumi units" to try to capture higher price by blocking them during earlier launching.
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Re: Releasing Unsold Bumi Units Helps To Reduce Price Pressu

Postby Property lover » Tue Jun 26, 2012 6:14 pm

Developer will love to release bumi allocation units for sale. The profit of the development could be locked in the form of unsold stocks, I.e. bumi units...

Though there are guidelines to follow before dev can eventually open the unit for sale, but having fulfilling the guideline (sufficient promotions etc) does not mean u can open the unit to non-bumi. Even when the bumi units are eventually release, it will be a bit by a bit...

Not easy, being in bolehland....
Printed on my son's T-shirt : " I am not perfect but I am a LIMITED edition!" :-)
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Re: Releasing Unsold Bumi Units Helps To Reduce Price Pressu

Postby rakyat » Wed Jun 27, 2012 9:21 am

Why do we still have bumi units in the 1st place? It is an arcane law and a legacy from a less altruisic times. Already many debate on how it is more of a burden to developers, buyers & society as a whole then an effective affirmative program (especially for the middle to high end developments).

Do we have the political will to do away with it and implement other more effective schemes?
Disclaimer: Suspect is an avid procurer of rumors, heresay, myths and assumptions without any rhyme nor reasoning. Take all comments with a pinch of salt and washed down a shot of tequila
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Re: Releasing Unsold Bumi Units Helps To Reduce Price Pressu

Postby victor » Wed Jun 27, 2012 10:38 am

rakyat wrote:Why do we still have bumi units in the 1st place? It is an arcane law and a legacy from a less altruisic times. Already many debate on how it is more of a burden to developers, buyers & society as a whole then an effective affirmative program (especially for the middle to high end developments).

Do we have the political will to do away with it and implement other more effective schemes?


agreed...similarly, selling some GLCs like proton, pos, etc to the tycoon of DRB Hicom will not help the poor at all... :lol: :lol: :lol: :lol:
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Re: Releasing Unsold Bumi Units Helps To Reduce Price Pressu

Postby ukulele » Wed Jun 27, 2012 11:12 am

some developers will not bother to allocate any bumi-quota, they'll just pay the fine or penalty and get over with it, whatever..
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Re: Releasing Unsold Bumi Units Helps To Reduce Price Pressu

Postby lonelyplanet » Wed Jun 27, 2012 11:27 am

victor wrote:Unsold bumi units should be released to the market to increase supply to reduce price pressure which is good for everyone......


in fact the developer need to pay the difference sum to the land office, in the case of unsold bumi units, the developer will not get any benefit but the authority.
For example, 100 units of 500K properties, 7% bumi discount means RM35k, let say bumi allocation is 50% or 50 units, say developer only managed to sell 20 bumi units, the developer need to pay 30units x 35K = > RM1mil to the authority to get bumi units released, so that it could be sold to the non bumi.
I am not sure this apply to all, but it applies to Tan& Tan, and Sunway.

For SP Setia, Boustead, they include building the low cost flats in the development to attract the bumi purchasers, and average up the bumi ownership (by units of household) so that they could meet the overall bumi ownership in the township planning.
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Re: Releasing Unsold Bumi Units Helps To Reduce Price Pressu

Postby lonelyplanet » Wed Jun 27, 2012 11:31 am

ukulele wrote:some developers will not bother to allocate any bumi-quota, they'll just pay the fine or penalty and get over with it, whatever..


some developers are very smart in the marketing-pricing strategy. Like DPC, they have such discount.
early bird - 3%
repeat customer - 5%
bumi discount - 5%

if u r a bumi repeat discount u can only enjoy up to 5%, means u can't get the repeat customer discount anymore.
for non bumi repeat customer, u enjoy 5%, as good as bumi buyer
if u r new customers and non bumi, u get 3% if u fast hand fast leg, slighly 2% lower than the other groups of customers.

Like that everyone happy.
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Re: Releasing Unsold Bumi Units Helps To Reduce Price Pressu

Postby aidapras » Wed Jun 27, 2012 6:02 pm

Well as someone who has watched pricing strategies being worked out for residential and commercial developments, I can tell you that buyers are the ones paying for this discount/quota. 30% to 40% of your GSV allocated as bumi lots is just added back as a markup that is shared by all units.

To illustrate with a simple (i.e. not all encompassing) example, lets say for instance:
1. 100 units cost price at RM700,000 each
2. Apply a highly conservative 30% profit margin, so the developer will sell a unit at RM1,000,000 each (list price)
3. Oh dear, I have to allocated 30% units for the bumi quota!
4. Lets assume you'd have to provide an additional 7% discount for 30% of the units, which adds up a RM2,100,000 value.
5. Now I have a few options to comfortably absorb the bumi quota at no cost to the developer. The developer isn't going to bear that cost, what happens then?
6. I'll just dump this cost back into each unit increasing the price by RM21,000 per unit.

Simplistic example, it's more complex than that, but the general idea is as such. What a ridiculous requirement this is! The end result is that it's just an additional cost that everyone bears.
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Re: Releasing Unsold Bumi Units Helps To Reduce Price Pressu

Postby Joshua » Wed Jun 27, 2012 6:06 pm

aidapras wrote:Well as someone who has watched pricing strategies being worked out for residential and commercial developments, I can tell you that buyers are the ones paying for this discount/quota. 30% to 40% of your GSV allocated as bumi lots is just added back as a markup that is shared by all units.

To illustrate with a simple (i.e. not all encompassing) example, lets say for instance:
1. 100 units cost price at RM700,000 each
2. Apply a highly conservative 30% profit margin, so the developer will sell a unit at RM1,000,000 each (list price)
3. Oh dear, I have to allocated 30% units for the bumi quota!
4. Lets assume you'd have to provide an additional 7% discount for 30% of the units, which adds up a RM2,100,000 value.
5. Now I have a few options to comfortably absorb the bumi quota at no cost to the developer. The developer isn't going to bear that cost, what happens then?
6. I'll just dump this cost back into each unit increasing the price by RM21,000 per unit.

Simplistic example, it's more complex than that, but the general idea is as such. What a ridiculous requirement this is! The end result is that it's just an additional cost that everyone bears.

what do you expect from a not so clever govt... :lol:
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