This trend
did not come unanticipated and in fact there have been some excellent responses
to this trend in the past especially by both the states and Federal Government.
There are several examples of well-planned and well-laid out estates that are
owned by the government.
Many of
these estates are still a point of reference today. They were planned with
enough space for recreation and other basic amenities that serve all the
residents. Many of these estates were built in the 70’s and 80’s.They often
leave you wondering what would have happened if we had continued consistently
in that direction.
One of the
concepts that were introduced then was that of acquiring land for public
purposes, designating some areas as Government Reserved Areas and then putting
infrastructures in place for the future residents .The process for acquiring a
plot of land in these estates is by applying to the relevant government
department and paying the required fees. In order to develop or sustain the
development, the government charges nominal annual rates that is determined and
collected by one of the state government agencies.
Today, many
of these estates have appreciated in value significantly. One of the state
governments at that time embarked on a mass affordable housing programme that
successfully made several individuals property owners. The designs were simple
and the price was reasonable. Many of those estates are now unofficially named
after those governors that instituted and completed them. They have also become
thriving communities with several businesses riding on the confluence of people
living in those estates.
However, for
several years after the above developments, the momentum had not been
sustained. Some of the projects are located in areas that have challenging
terrains and without provision of basic infrastructures such as roads and
drainages. The challenging terrain had made development very slow. There are
housing estates that have negligible developments in the past 10 to 15 years
.For some, it is not certain when the government will put the promised
infrastructure in place.
This
scenario has become a window of opportunity to some private developers who have
the foresight to recognise it. There are private estates that are now offering
their residents what the government has neglected or failed to provide to
residents in its own estates. These estates come up with various packages and
benefits in order to set themselves apart from the pack. They make provision
for road, water treatment plants, power generation, security and some other
services. Some of these estates promise their residents uninterrupted power and
water supply. These services are managed by a property or facility management
company and they charge annual services charge which are subject to upward
reviews.
The demand
for these private estates is growing even though the price of a property is
quite steep in some of them. However, for those who can afford it, the comfort,
convenience and climate are irresistible. In some cases, the property
developers offer a site and services scheme to stakeholders. In this instance,
instead of offering the intending residents a completed house they propose to
sell undeveloped land with the promise to do the entire infrastructure. Most of
these projects are sold off plan and perhaps because of insufficient funds many
of these projects have taken years to reach any major milestone.
It is clear
that the government cannot meet the housing challenge alone due to the enormity
of the situation as well as limited funds. However, there is a lot that the
government and property developers can do together. The government should
provide easier access to land for developers, faster documentation process and
single digit real estate finance. It is important for the government to also
address the challenges of traditional land owners that has now become a menace
to property development.
The desire
to live in a safe and secure environment with basic amenities in place will
continue to increase. Presently, private estates that offer these facilities
are charging a premium and several millions are not opportune to access them.
Already the high end of the market is becoming very volatile and the slowdown
in the economy is affecting that sector. Property developers, in conjunction
with government or using their own resources, who can provide these services at
an affordable price, will definitely make significant profits. (punch)
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