MANY real estate projects in Sabah are on hold as the development plans are still being held by the central board, say developers in the state.

The board remains functional despite Chief Minister Shafie Apdal saying three weeks ago that it would be dismantled and a new system put in place to speed up the approval of development plans.  

Sabah Housing and Real Estate Developers Association (Shareda) president Chew Shang Hai told The Malaysian Insight that developers are still waiting for a “letter” from the state government that the unit had been scrapped.

“There is still no news from the chief minister. There is no letter from the government.

“So our development plans are still there (with the central board). We can’t say anything more until we receive the letter,” he said.

Several developers in the state are complaining that they have suffered losses because their projects had been put on hold several times by the central board.

The extended approval process has long been a bane for Sabah developers and among the reasons for increasing property prices in the state.

As a result, Shareda reported a 76% drop in value of new launches from RM7 billion in 2012 to RM1.7 billion in 2016, forcing several developers to close shop.

Shareda says property prices could be reduced by about 5% if the approval of plans was faster than the present 24 to 36 months as practised by the central board.

The lengthy duration means developers have to transfer the cost of land premiums, interests on loans and other operational costs to buyers.

The approval process had been handled by local councils, until the previous Barisan Nasional government centralised the system.

When asked about the impact of the Sales and Services Tax (SST), Chew said that building materials account for about 20% of the total development cost and when the SST is factored, the decrease could only be about 1.5% or below 2% of the construction costs.

Construction materials including cement, sand and iron and construction services are exempt from the SST. – September 11, 2018.