PR1MA to continue giving discounts up to 20%

Up to 53 PR1MA projects nationwide will be opened for discounts and rebates throughout 2020

by AFIQ AZIZ / pic by MUHD AMIN NAHARUL

PERBADANAN PR1MA Malaysia is expected to continue giving discounts of up to 20% to its buyers, despite the absence of the Home Ownership Campaign (HOC), in line with its aim to clear off at least RM3 billion of unsold houses.

In an emailed reply to queries by The Malaysian Reserve (TMR), PR1MA stated that the discounts would vary depending on the type of projects and locations.

“Up to 53 PR1MA projects nationwide, totalling more than 13,000 units with a gross development value of more than RM3 billion, will be opened for discounts and rebates throughout 2020.

“All in all, we expect to complete up to 82,560 residential units from 2018 to 2028,” the agency said.

PR1MA is also optimistic that it would deliver its primary promises in providing affordable houses to the people, after the national housing company completed its due diligence process last year.

During the 12-month HOC last year, 9,306 units of PR1MA houses were sold, some 90% of the total 10,797 units that were cleared in the past one year.

Under the original plan, PR1MA was envisioned to build up to one million homes by 2020.

However, between 2013 and 2018, the company only managed to complete 1.6% of the target, while consuming more than RM8 billion of public funds.

According to the Housing and Local Government (KPKT) Minister Zuraida Kamaruddin, PR1MA’s success in 2019, particularly during the HOC, had managed to reduce its debts to RM11 billion from the previous RM24 billion.

PR1MA offered up to 30% price cuts during the HOC, while other developers were required to offer a minimum of 10% discounts that granted them stamp duty exemptions from financial institutions.

Zuraida had urged housing developers to continue offering price cuts even after the HOC ended.

Prior to PR1MA’s turnaround exercise, it’s “failure” was attributed to the number of unsold houses which was due to bad choices of locations, undelivered units to buyers and bad debt record to the contractors.

Zuraida recently announced that PR1MA will remain in business and the agency could still help the government provide one million affordable houses to the people within the next decade.

Last month, Zuraida announced that about 56,342 units of houses under the remaining 65 PR1MA projects have been approved for resumption.

She said the Finance Ministry had allotted RM641.9 million to pay off PR1MA’s long outstanding payments to the contractors which had been prolonged for over a year, to continue with all the projects. That projects that have reached 90% of completion will be completed at the contractor’s expense.

In total, she said up to RM1.03 billion was collected by PR1MA last year, and the KPKT aims to zero-rise PR1MA’s debt by 2023.

As for this year, Zuraida said 19,797 PR1MA units have already been booked and are waiting for loan approval.

Another issue that was highlighted was the dissatisfaction among buyers who bought the houses at a higher price prior to the introduction of the HOC.

The buyers claimed that they had to incur losses of up to 30% compared to all the rebates and discounts that were offered to purchasers via the HOC.

Last November, Zuraida met with 60 complainants, who might be enjoying cash rebates, depending on a case-to-case basis.

Established in 2012 by the previous administration, PR1MA was mandated to provide quality affordable homes, priced between RM100,000 and RM400,000 for households earning between RM2,500 and RM15,000 per month.

In the emailed reply to TMR queries, PR1MA stated it will remain to its original agenda.

“However, in realigning with the National Affordable Housing Policy launched by the KPKT in May 2019, PR1MA plans to develop more homes priced below RM300,000.

“PR1MA will continue to focus on building holistic developments to create a harmonious community living for its residents,” it said.

Moving forward, the company has forecast that the affordable home segment will remain positive, stimulated by government schemes such as the rent-to-own programme for those who could not afford the 10% down payment.