KUALA LUMPUR: The Cabinet does not agree with the Selangor Government’s proposal to sell low-cost houses to the high-income group, the Prime Minister Datuk Seri Abdullah Ahmad Badawi said. 

He said the Federal Government would stick to its policy of building the houses only for the low-income group. 

“This is the Federal Government’s policy, which should also be adhered to by the state government,” the Prime Minister said in an interview. 

He was asked to comment on the proposal by Selangor Mentri Besar Datuk Seri Dr Mohamad Khir Toyo to resolve the large number of unsold low-cost units in the state. 

Abdullah said the Cabinet took note of the issue, which has been hotly debated in the press and with several groups opposing it. 

He said the cause of the problem of low-cost houses remaining unsold should be studied to enable the low-income group to own houses. 

First, the method of financing should be more innovative so that down payments and monthly instalments could be further lowered, he said. 

The Prime Minister said the buyers should be allowed to rent the houses and the rentals could later be converted into instalment payments for the house. 

The Prime Minister said the criteria to determine eligibility should also be  

reviewed so as to arrive at a more appropriate method that would not be based purely on salary calculations. 

For instance, a couple earning RM1,500 a month who have six or seven children would be in a more difficult position than a couple with an income of RM1,000 who have no children. 

This meant a new formula should be drawn up which would take into account the total income and the number of dependants, such as parents, before deciding on the eligibility of the person to buy the house, he said. 

This way, those with bigger incomes could also be eligible to buy the houses. 

Abdullah said sites for low-cost homes should have public utilities such as an efficient transport system. 

“The problem of unsold houses existed because of a mismatch between house suppliers and buyers,” he added. 

“So, we are going to match the buyers and developers. 

“The problem of mismatch sometimes creates an impression of too many unsold houses and on the other hand there are many people who want to buy houses but the houses are not available or the supply is not enough,” he said. 

In Shah Alam, the Selangor Mentri Besar's office released a press statement last night acknowledging the Cabinet's decision. 

“The state government accepts and abides by the decision made by the Cabinet. The state also welcomes the Cabinet's intention to help manage the problem of oversupply of low-cost houses in the state,” said the press statement.

Source : The Star  15/4/2004