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