Building Investment (September - October 2018)

In Malaysia, various costs and requirements are imposed to developer associated
(Table 1).
(i)land cost; (ii) (includes architectural cost, C&S cost, M&E
(refers to as architectural
(Figure 1).
this development barrier will
Figure 1: Percentage of distribution of the total development
.
costs.
DEVELOPMENT STAGE
Land
Planning
Housing policies
Design & approvals
Construction
Infrastructure & utilities
Taxation
Other compliance
COST ELEMENTS
· Land conversion premium
· Planning requirements for facilities and social
amenities – reducing buildable land
· Environment impact assessment study, social
impact assessment study
· Development charges
· Density, limiting number of units
· Parking requirements
· Low cost, low medium cost & affordable housing
quota – cross subsidies
· Bumiputra quota, discounts & release mechanism of
unsold units – cross subsidies & holding costs
· High specifications in terms of minimum lot sizes,
minimum design, minimum facilities for subsidized
housing
· Increased professional fees, upfront fee payments
· Lengthy approval process – time costs
· Construction levy
· Foreign labor levy
· Compliance of construction site requirements
· Capital contribution charges – water sewerage, TNB
· Surrender of land for plant & machinery/construction
of plant
· Supply of spare parts
· Higher requirements for road and drainage
· Stamp duty
· Legislative compliance
· Upfront payments
Table 1: Development stages and compliance costs.
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